SSB 3034 (LSB 5407XL (12) 91)

SENATE/HOUSE FILE _____

BY  (PROPOSED GOVERNOR BILL)

A BILL FOR

An Act relating to state and local government taxes, budgets, and authority, by modifying provisions relating to the assessment and taxation of property, funding from the secure an advanced vision for education fund, the election of certain county officers, urban renewal areas and urban revitalization areas, establishing a rent reimbursement program, establishing a program for certain first-time homebuyers, establishing a local government shared-services grant fund, making appropriations, and including effective date, applicability, and retroactive applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

DIVISION I
PROPERTY TAX REVENUE LIMITATIONS —— BOND REVENUE USE LIMITATIONS

    Section 1.  Section 11.11, Code 2026, is amended to read as follows:
   11.11  Scope of audits.
   The written report of the audit of a governmental subdivision shall include the auditor’s opinion as to whether a governmental subdivision’s financial statements are presented fairly in all material respects in conformity with generally accepted accounting principles or with an other another comprehensive basis of accounting. As a part of conducting an audit of a governmental subdivision, an evaluation of internal control and tests for compliance with laws and regulations shall be performed. As part of conducting an audit of a governmental subdivision, an examination of the governmental subdivision’s compliance with the reporting requirements of section 331.403, subsection 3, or section 384.22, subsection 2, if applicable, shall be performed.  As part of conducting an audit of a governmental subdivision for fiscal years beginning on or after July 1, 2027, an examination of the governmental subdivision’s compliance with section 24.35 shall be performed, including verification of the circumstances resulting in actual reserve funds exceeding the specified limits.
    Sec. 2.  Section 24.34, Code 2026, is amended to read as follows:
   24.34  Unliquidated obligations.
   A city, county, or other political subdivision governmental entity, as defined in section 24.35, may establish an encumbrance system for any obligation not liquidated at the close of the fiscal year in which the obligation has been encumbered assigned, committed, restricted, or specified as nonspendable. The encumbered obligations may be retained upon the books of the city, county, or other political subdivision until liquidated, all in accordance with generally accepted governmental accounting practices principles, as established by the governmental accounting standards board.
    Sec. 3.  NEW SECTION.  24.35  General fund reserves —— limitations.
   1.  For purposes of this section:
   a.  “Budget year” is the fiscal year beginning during the calendar year in which a budget is certified.
   b.  “Current fiscal year” is the fiscal year ending during the calendar year in which a budget for the budget year is certified.
   c.  “General fund” means a governmental entity’s fund designated as such by law or the governmental entity’s fund from which primary general operations of the governmental entity are funded.
   d.  “Governmental entity” means any unit of government or other public body or public corporation, including any intergovernmental entity, that has the power to impose or certify a property tax levy. “Governmental entity” does not include a school district.
   e.  “Unassigned” means funds that are not restricted, committed, assigned, or nonspendable within the meaning of generally accepted accounting principles, as established by the governmental accounting standards board.
   2.  a.  For budgets certified for budget years beginning on or after July 1, 2027, proposed unassigned reserve funds identified within a governmental entity’s general fund shall not exceed an amount equal to ten percent of the budgeted expenditures from the governmental entity’s general fund for the current fiscal year prior to budgeted transfers from such general fund.
   b.  If the governmental entity’s budget does not comply with the requirements of paragraph “a”, the department of management shall not certify the governmental entity’s taxes back to the county auditor under section 24.17 and the governmental entity shall remedy the violation and recertify the budget.
   3.  To ensure uniformity, accuracy, and efficiency in the certification of governmental entity budgets according to the requirements of this section, the department of management shall prescribe the procedures to be used and instruct the appropriate officials of the various governmental entities on implementation of the procedures.
    Sec. 4.  Section 24.48, Code 2026, is amended by adding the following new subsection:
   NEW SUBSECTION.  6.  The authority to suspend property tax levy limitations under this section shall not apply to the limitations of section 444.25, except for the reasons specified under subsection 1, paragraph “b” or “c”.
    Sec. 5.  Section 176A.8, subsection 13, Code 2026, is amended by striking the subsection.
    Sec. 6.  NEW SECTION.  444.25  Maximum property tax levy dollars.
   1.  For purposes of this section, unless the context otherwise requires:
   a.  “Budget year” is the fiscal year beginning during the calendar year in which a budget is certified.
   b.  “Current fiscal year” is the fiscal year ending during the calendar year in which a budget for the budget year is certified.
   c.  “Governmental entity” means any unit of government or other public body or public corporation, including any intergovernmental entity or special purpose district, that has the power to impose or certify a property tax levy. “Governmental entity” does not include a school district.
   d.  “New valuation” means the increase from the current fiscal year to the budget year in taxable valuation, as shown on the assessment roll due to the following, the amount of each as reported under section 331.510 by the county auditor to the department of management:
   (1)  New construction.
   (2)  Additions or improvements to existing structures that are not normal and necessary repairs under section 441.21, subsection 8.
   (3)  Net boundary adjustments, including annexation, severance, incorporation, consolidation, or discontinuance as those terms are defined in section 368.1.
   e.  “Property tax levy” means each ad valorem property tax authorized by law to be imposed by a governmental entity, but excluding any levy the revenue from which is specified by law for debt service or required to be used exclusively for the repayment of bonds or other indebtedness. The levy under section 384.1, subsection 2, on tracts of land and improvements thereon used and assessed for agricultural or horticultural purposes, shall be considered a separate property tax levy under this section.
   2.  a.  (1)  For the budget year beginning July 1, 2027, and each budget year thereafter, the maximum aggregate amount of property tax dollars that may be certified for levy among all property tax levies imposed by a governmental entity shall not exceed an amount equal to the sum of one hundred two percent of the aggregate amount of property tax dollars certified for levy by the governmental entity among all property tax levies imposed by the governmental entity for the current fiscal year plus the sum of the new valuation growth amount for each of the governmental entity’s property tax levies for the budget year.
   (2)  The new valuation growth amount for each property tax levy is equal to the product of the following:
   (a)  A levy rate per one thousand dollars of assessed value equal to one thousand multiplied by the quotient of one hundred two percent of the aggregate amount of property tax dollars certified for the levy by the governmental entity for the current fiscal year divided by the remainder of the total assessed value used to calculate such taxes for the property tax levy within the governmental entity for the budget year minus value attributable to new valuation.
   (b)  The amount of assessed value used to calculate such taxes for the property tax levy within the governmental entity for the budget year attributable to new valuation.
   b.  If the budget year includes a voter-approved property tax levy that was not approved for imposition in the current fiscal year, the maximum aggregate amount of property tax dollars for the governmental entity under paragraph “a” for the budget year shall be increased by the amount of the voter approved property tax levy approved at election for the budget year. If the current fiscal year includes a voter-approved property tax levy that is not approved for imposition in the budget year, the maximum aggregate amount of property tax dollars for the governmental entity under paragraph “a” for the budget year shall be reduced by the amount of the voter approved property tax levy for the current fiscal year.
   c.  The amount of property tax dollars calculated under this section includes those amounts budgeted by the governmental entity as replacement taxes under chapter 437A or 437B, if applicable.
   3.  For purposes of this section, if the governmental entity’s taxes for a property tax levy were not certified back by the department of management under section 24.17 for the current fiscal year due to an act or omission of the governmental entity, the current fiscal year’s property tax dollars certified for levy for that property tax levy shall be equal to the amount certified for levy for the fiscal year immediately preceding the current fiscal year.
   4.  If a governmental entity certifies a budget that violates this section, the department of management shall reduce each of the applicable governmental entity’s property tax levies on a pro rata basis so that the governmental entity is in compliance with this section.
   5.  This section shall not be construed as removing or otherwise affecting the property tax limitations, including levy rate and use limitations, otherwise provided by law for any property tax levy of the governmental entity.
    Sec. 7.  NEW SECTION.  444.26  Use of bonds and indebtedness for general operations —— prohibition.
   1.  For purposes of this section:
   a.  “General operations” means services or activities generally funded from the governmental entity’s general fund, which are necessary for the operation of the governmental entity, including salaries and benefits, or which are for the health and welfare of the governmental entity’s citizens or primarily intended to benefit all residents of the governmental entity, but excluding services financed by statutory funds other than a debt service fund.
   b.  “Governmental entity” means any unit of government or other public body or public corporation, including any intergovernmental entity, that has the power to impose or certify a property tax levy.
   2.  On or after July 1, 2026, the governing body of a governmental entity shall not issue bonds or other indebtedness payable from an ad valorem property tax levy for the purpose of funding the general operations of the governmental entity or otherwise use proceeds from the sale of bonds or issuance of other indebtedness to fund general operations.
   3.  The department of management, following consultation with the city finance committee and the county finance committee, may adopt rules under chapter 17A for governmental entities to implement this section.
DIVISION II
COMMERCIAL AND INDUSTRIAL PROPERTY ASSESSMENT LIMITATIONS

    Sec. 8.  Section 441.21, subsection 5, paragraph b, subparagraph (2), subparagraph divisions (a) and (b), Code 2026, are amended to read as follows:
   (a)  An amount equal to the product of the assessment limitation percentage applicable to residential property under subsection 4 for that assessment year multiplied by the actual value of the property that exceeds zero dollars but does not exceed one two hundred fifty thousand dollars.
   (b)  An amount equal to ninety percent of the actual value of the property for that assessment year that exceeds one two hundred fifty thousand dollars.
    Sec. 9.  Section 441.21, subsection 5, paragraph c, subparagraph (2), subparagraph divisions (a) and (b), Code 2026, are amended to read as follows:
   (a)  An amount equal to the product of the assessment limitation percentage applicable to residential property under subsection 4 for that assessment year multiplied by the actual value of the property that exceeds zero dollars but does not exceed one two hundred fifty thousand dollars.
   (b)  An amount equal to ninety percent of the actual value of the property for that assessment year that exceeds one two hundred fifty thousand dollars.
    Sec. 10.  Section 441.21, subsection 5, paragraph e, subparagraphs (1), (2), and (3), Code 2026, are amended to read as follows:
   (1)  For the fiscal year beginning July 1, 2023, there is appropriated from the general fund of the state to the department of revenue the sum of one hundred twenty-two million three hundred fifty thousand dollars to be used for payments under this paragraph calculated as a result of the assessment limitations imposed under paragraph “b”, subparagraph (2), subparagraph division (a), and paragraph “c”, subparagraph (2), subparagraph division (a). For each fiscal year beginning on or after July 1, 2024, but before July 1, 2027, there is appropriated from the general fund of the state to the department of revenue the sum of one hundred twenty-five million dollars to be used for payments under this paragraph calculated as a result of the assessment limitations imposed under paragraph “b”, subparagraph (2), subparagraph division (a), and paragraph “c”, subparagraph (2), subparagraph division (a). 
   (2)  For fiscal years beginning on or after July 1, 2023, but before July 1, 2027, each county treasurer shall be paid by the department of revenue an amount calculated under subparagraph (4) for the applicable fiscal year. If an amount appropriated for the fiscal year is insufficient to make all payments as calculated under subparagraph (4), the director of revenue shall prorate the payments to the county treasurers and shall notify the county auditors of the pro rata percentage on or before September 30. 
   (3)  On or before July 1 of each applicable fiscal year, the assessor shall report to the county auditor that portion of the total actual value of all commercial property and industrial property in the county that is subject to the assessment limitations imposed under paragraph “b”, subparagraph (2), subparagraph division (a), and paragraph “c”, subparagraph (2), subparagraph division (a), for the assessment year used to calculate the taxes due and payable in that fiscal year.
    Sec. 11.  Section 441.21, subsection 5, paragraph e, subparagraph (4), unnumbered paragraph 1, Code 2026, is amended to read as follows:
   On or before September 1 of each applicable fiscal year, the county auditor shall prepare a statement, based on the report received in subparagraph (3) and information transmitted to the county auditor under chapter 434, listing for each taxing district in the county:
    Sec. 12.  RETROACTIVE APPLICABILITY.  The following apply retroactively to assessment years beginning on or after January 1, 2026:
   1.  The section of this division of this Act amending section 441.21, subsection 5, paragraph “b”, subparagraph (2), subparagraph divisions (a) and (b).
   2.  The section of this division of this Act amending section 441.21, subsection 5, paragraph “c”, subparagraph (2), subparagraph divisions (a) and (b).
DIVISION III
PROPERTY TAX EXEMPTIONS AND CREDITS

    Sec. 13.  Section 2.48, subsection 3, paragraph f, subparagraphs (1) and (2), Code 2026, are amended to read as follows:
   (1)  The homestead property tax exemption and credit under chapter 425, subchapter I.
   (2)  The elderly and disabled property tax growth credit under chapter 425, subchapter II.
    Sec. 14.  Section 10A.518, subsection 2, paragraph b, Code 2026, is amended to read as follows:
   b.  The rules shall require the installation of smoke detectors in existing single-family rental units and multiple-unit residential buildings. Existing single-family dwelling units shall be equipped with approved smoke detectors. A person who files for a homestead credit exemption pursuant to chapter 425, subchapter I, shall certify that the single-family dwelling unit for which the credit exemption is filed has a smoke detector installed in compliance with this section, or that one will be installed within thirty days of the date the filing for the credit exemption is made. The director shall adopt rules and establish appropriate procedures to administer this subsection.
    Sec. 15.  Section 10A.518, subsection 3, paragraph b, Code 2026, is amended to read as follows:
   b.  The rules shall require the installation of carbon monoxide alarms in existing single-family rental units and multiple-unit residential buildings that have a fuel-fired heater or appliance, a fireplace, or an attached garage. Existing single-family dwellings that have a fuel-fired heater or appliance, a fireplace, or an attached garage shall be equipped with approved carbon monoxide alarms. For purposes of this paragraph, “approved carbon monoxide alarm” means a carbon monoxide alarm that meets the standards established by the underwriters’ laboratories or is approved by the director as established by rule under subsection 5. A person who files for a homestead credit exemption pursuant to chapter 425, subchapter I, shall certify that the single-family dwelling for which the credit exemption is filed and that has a fuel-fired heater or appliance, a fireplace, or an attached garage, has carbon monoxide alarms installed in compliance with this section, or that such alarms will be installed within thirty days of the date the filing for the credit exemption is made. The director shall adopt rules and establish appropriate procedures to administer this subsection.
    Sec. 16.  Section 25B.7, subsection 2, Code 2026, is amended by striking the subsection.
    Sec. 17.  Section 103.22, subsection 7, Code 2026, is amended to read as follows:
   7.  Prohibit an owner of property from performing work on the owner’s principal residence, if such residence is an existing dwelling rather than new construction and is not an apartment that is attached to any other apartment or building, as those terms are defined in section 499B.2, and is not larger than a single-family dwelling, or require such owner to be licensed under this chapter. In order to qualify for inapplicability pursuant to this subsection, a residence shall qualify for the homestead tax credit exemption.
    Sec. 18.  Section 105.11, subsection 3, Code 2026, is amended to read as follows:
   3.  Prohibit an owner of property from performing work on the owner’s principal residence, if such residence is an existing dwelling rather than new construction and is not larger than a single-family dwelling, or farm property, excluding commercial or industrial installations or installations in public use buildings or facilities, or require such owner to be licensed under this chapter. In order to qualify for inapplicability pursuant to this subsection, a residence shall qualify for the homestead tax credit exemption.
    Sec. 19.  Section 216.12, subsection 1, paragraph e, Code 2026, is amended to read as follows:
   e.  The rental or leasing of a housing accommodation in a building which contains housing accommodations for not more than four families living independently of each other, if the owner resides in one of the housing accommodations for which the owner qualifies for the homestead tax credit exemption under section 425.1 chapter 425, subchapter I.
    Sec. 20.  Section 321.1, subsection 6C, Code 2026, is amended to read as follows:
   6C.  “Bona fide residence” or “bona fide address” means the current street or highway address of an individual’s residence. The bona fide residence of a person with more than one dwelling is the dwelling for which the person claims a homestead tax credit exemption under chapter 425, subchapter I, if applicable. The bona fide residence of a homeless person is a primary nighttime residence meeting one of the criteria listed in section 48A.2, subsection 3.
    Sec. 21.  Section 331.401, subsection 1, paragraphs e and f, Code 2026, are amended to read as follows:
   e.  Adopt resolutions authorizing the county assessor to provide forms for homestead tax exemption and credit claimants as provided in section 425.2 and military service tax exemptions as provided in section 426A.14.
   f.  Examine and allow or disallow claims for homestead tax exemption and credit in accordance with section 425.3 chapter 425, subchapter I, and claims for military service tax exemption in accordance with chapter 426A. The board, by a single resolution, may allow or disallow the exemptions recommended by the assessor.
    Sec. 22.  Section 331.512, subsection 3, Code 2026, is amended to read as follows:
   3.  Carry out duties relating to the homestead tax exemption and credit and agricultural land tax credit as provided in chapters 425 and 426.
    Sec. 23.  Section 331.559, subsection 11, Code 2026, is amended to read as follows:
   11.  Carry out duties relating to the administration of the homestead tax exemption and credit and other credits as provided in sections 425.4, 425.5, 425.7, 425.9, 425.10, and 425.25 chapter 425.
    Sec. 24.  Section 404.3, subsection 1, Code 2026, is amended to read as follows:
   1.  All qualified real estate assessed as residential property is eligible to receive an exemption from taxation based on the actual value added by the improvements. The exemption is for a period of ten years. The amount of the exemption is equal to a percent of the actual value added by the improvements, determined as follows:  One hundred fifteen percent of the value added by the improvements. However, the amount of the actual value added by the improvements which shall be used to compute the exemption shall not exceed twenty thousand dollars and the granting of the exemption shall not result in the actual value of the qualified real estate being reduced below the actual value on which the homestead credit exemption is computed under section 425.1.
    Sec. 25.  Section 425.1, Code 2026, is amended by striking the section and inserting in lieu thereof the following:
   425.1  Property tax exemption.
   1.  For each assessment year beginning on or after January 1, 2026, an exemption from taxation shall be allowed on each eligible homestead as follows:
   a.  Except as provided in paragraph “b”, the eligible homestead, not to exceed four thousand eight hundred fifty dollars in taxable value.
   b.  (1)  If the owner of the homestead is any of the following, the exemption allowed on the homestead shall be the entire taxable value of the homestead:
   (a)  A veteran of any of the military forces of the United States who acquired the homestead under 38 U.S.C. §21.801, 21.802, prior to August 6, 1991, or under 38 U.S.C. §2101, 2102.
   (b)  A veteran as defined in section 35.1 with a permanent service-connected disability rating of one hundred percent, as certified by the United States department of veterans affairs, or a permanent and total disability rating based on individual unemployability that is compensated at the one hundred percent disability rate, as certified by the United States department of veterans affairs.
   (c)  A former member of the national guard of any state who otherwise meets the service requirements of section 35.1, subsection 2, paragraph “b”, subparagraph (2) or (7), with a permanent service-connected disability rating of one hundred percent, as certified by the United States department of veterans affairs, or a permanent and total disability rating based on individual unemployability that is compensated at the one hundred percent disability rate, as certified by the United States department of veterans affairs.
   (d)  An individual who is a surviving spouse or a child and who is receiving dependency and indemnity compensation pursuant to 38 U.S.C. §1301 et seq., as certified by the United States department of veterans affairs.
   (2)  (a)  For an owner described in subparagraph (1), subparagraph division (a), (b), or (c), the exemption allowed shall be continued to the estate of an owner who is deceased or the surviving spouse and any child, as defined in section 234.1, who are the beneficiaries of a deceased owner, so long as the surviving spouse remains unmarried.
   (b)  An individual described in subparagraph (1), subparagraph division (d), is no longer eligible for the exemption upon termination of dependency and indemnity compensation under 38 U.S.C. §1301 et seq.
   (3)  An owner or a beneficiary of an owner who elects to secure the exemption provided in this paragraph is not eligible for the exemption provided in paragraph “a” or any other real property tax credit or exemption provided by law for veterans of military service.
   (4)  If an owner acquires a different homestead, the exemption allowed under this paragraph may be claimed on the new homestead unless the owner fails to meet the other requirements of this paragraph.
   (5)  (a)  Except as provided in subparagraph division (b), the list of the names and addresses of individuals allowed an exemption under this paragraph and maintained by the county recorder, county treasurer, county assessor, city assessor, or other governmental body is confidential information and shall not be disseminated to any person unless otherwise ordered by a court or released by the lawful custodian of the records pursuant to state or federal law. The county recorder, county treasurer, county assessor, city assessor, or other governmental body responsible for maintaining the names and addresses of individuals allowed an exemption under this paragraph may display such exemption on individual paper records and individual electronic records, including display on an internet site.
   (b)  Upon request, a county recorder, county assessor, city assessor, or other entity may share information as described in subparagraph division (a) to a county veterans service officer for purposes of providing information on benefits and services available to veterans and their families.
   (6)  For purposes of this paragraph, “permanent and total disability rating based on individual unemployability” means a condition under which a person has either a permanent service-connected disability rating of sixty percent or two or more permanent service-connected disability conditions in which one of the conditions has at least a forty percent rating and the combined rating for all the conditions is at least seventy percent, and the person has an administrative adjustment added to the service-connected disability rating, due to individual unemployability, such that the United States department of veterans affairs rates the veteran permanently and totally disabled for purposes of disability compensation.
   2.  Section 25B.7 shall not apply to the property tax exemption provided in this subchapter.
   3.  Homestead credit claims approved under chapter 425, subchapter I, Code 2026, prior to and valid on the effective date of this division of this Act shall result in a homestead exemption under this subchapter I without further filing by the claimant if the claimant meets the criteria for the exemption and the assessor has appropriate information to verify such eligibility.
    Sec. 26.  Section 425.2, Code 2026, is amended to read as follows:
   425.2  Qualifying for credit exemption.
   1.  A person who wishes to qualify for the homestead credit exemption allowed under this subchapter shall obtain the appropriate forms for filing for the credit exemption from the assessor. The person claiming the credit exemption shall file a verified statement and designation of homestead with the assessor for the year for which the person is first claiming the credit exemption. The claim shall be filed not later than July 1 of the year for which the person is claiming the credit exemption. A claim filed after July 1 of the year for which the person is claiming the credit exemption shall be considered as a claim filed for the following year.
   2.  Upon the filing and allowance of the claim, the claim shall be allowed on that homestead for successive years without further filing as long as the property is legally or equitably owned and used as a homestead by that person or that person’s spouse on July 1 of each of those successive years, and the owner of the property being claimed as a homestead declares residency in Iowa for purposes of income taxation, and the property is occupied by that person or that person’s spouse for at least six months in each of those calendar years in which the fiscal year begins. When the property is sold or transferred, the buyer or transferee who wishes to qualify shall refile for the credit exemption. However, when the property is transferred as part of a distribution made pursuant to chapter 598, the transferee who is the spouse retaining ownership of the property is not required to refile for the credit exemption. Property divided pursuant to chapter 598 shall not be modified following the division of the property. An owner who ceases to use a property for a homestead or intends not to use it as a homestead for at least six months in a calendar year shall provide written notice to the assessor by July 1 following the date on which the use is changed. A person who sells or transfers a homestead or the personal representative of a deceased person who had a homestead at the time of death, shall provide written notice to the assessor that the property is no longer the homestead of the former claimant.
   3.  In case the owner of the homestead is in active service in the armed forces of this state or of the United States, or is sixty-five years of age or older, or is disabled, the statement and designation may be signed and delivered by any member of the owner’s family, by the owner’s guardian or conservator, or by any other person who may represent the owner under power of attorney. If the owner of the homestead is married, the spouse may sign and deliver the statement and designation. The director of health and human services or the director’s designee may make application for the benefits of this subchapter as the agent for and on behalf of persons receiving assistance under chapter 249.
   4.  The form for claiming the credit shall also include the ability to claim the exemption under section 425.1A for qualified owners. If the claim for the homestead credit is allowed, such allowance shall also include allowance of the homestead exemption if the owner meets the age criteria for the exemption. The homestead exemption shall be allowed for successive years without further filing in the same manner as the homestead credit.
   5.  4.  Any person sixty-five years of age or older or any person who is disabled may request, in writing, from the appropriate assessor forms for filing for the homestead tax credit exemption. Any person sixty-five years of age or older or who is disabled may complete the form, which shall include a statement of homestead, and mail or return it to the appropriate assessor. The signature of the claimant on the statement shall be considered the claimant’s acknowledgment that all statements and facts entered on the form are correct to the best of the claimant’s knowledge.
   6.  5.  Upon adoption of a resolution by the county board of supervisors, any person may request, in writing, from the appropriate assessor forms for the filing for homestead tax credit exemption. The person may complete the form, which shall include a statement of homestead, and mail or return it to the appropriate assessor. The signature of the claimant on the statement of homestead shall be considered the claimant’s acknowledgment that all statements and facts entered on the form are correct to the best of the claimant’s knowledge.
    Sec. 27.  Section 425.3, Code 2026, is amended to read as follows:
   425.3  Verification of claims for homestead credit exemption.
   1.  The assessor shall retain a permanent file of current homestead exemption claims filed in the assessor’s office. The assessor shall file a notice of transfer of property for which a claim is filed when notice is received from the office of the county recorder.
   2.  The county recorder shall give notice to the assessor of each transfer of title filed in the recorder’s office. The notice shall describe the property transferred, the name of the person transferring the title to the property, and the name of the person to whom title to the property has been transferred.
   3.  Not later than July 6 of each year, the assessor shall remit the statements and designation of homesteads to the county auditor with the assessor’s recommendation for allowance or disallowance. If the assessor recommends disallowance of a claim, the assessor shall submit the reasons for the recommendation, in writing, to the county auditor.
   4.  The county auditor shall forward the claims to the board of supervisors. The board shall allow or disallow the claims. If the board disallows a claim, it shall send written notice, by mail, to the claimant at the claimant’s last known address. The notice shall state the reasons for disallowing the claim. The board is not required to send notice that a claim is disallowed if the claimant voluntarily withdraws the claim.
    Sec. 28.  Section 425.4, Code 2026, is amended to read as follows:
   425.4  Certification to treasurer.
   All claims which have been allowed by the board of supervisors shall be certified on or before August 1, in each year, by the county auditor to the county treasurer, which certificates shall list the total amount of dollars, listed by taxing district in the county, due for homestead tax exemptions and credits claimed and allowed assessor. The county treasurer shall then certify to the department of revenue the total amount of dollars, listed by taxing district in the county, due for homestead tax credits claimed and allowed.
    Sec. 29.  Section 425.6, Code 2026, is amended to read as follows:
   425.6  Waiver by neglect.
   If a person fails to file a claim or to have a claim on file with the assessor for the credits exemption provided in this subchapter, the person is deemed to have waived the homestead exemption and credit for the year in which the person failed to file the claim or to have a claim on file with the assessor.
    Sec. 30.  Section 425.7, subsection 3, Code 2026, is amended to read as follows:
   3.  a.  If the department of revenue determines that a claim for homestead exemption and credit has been allowed by the board of supervisors which is not justifiable under the law and not substantiated by proper facts, the department may, at any time within thirty-six months from July 1 of the year in which the claim is allowed, set aside the allowance. Notice of the disallowance shall be given to the county auditor of the county in which the claim has been improperly granted and a written notice of the disallowance shall also be addressed to the claimant at the claimant’s last known address. The claimant or board of supervisors may appeal to the director of revenue within thirty days from the date of the notice of disallowance. The director shall grant a hearing and if, upon the hearing, the director determines that the disallowance was incorrect, the director shall set aside the disallowance. The director shall notify the claimant and the board of supervisors of the result of the hearing. The claimant or the board of supervisors may seek judicial review of the action of the director of revenue in accordance with chapter 17A.
   b.  If a claim is disallowed by the department of revenue and not appealed to the director of revenue or appealed to the director of revenue and thereafter upheld upon final resolution, including any judicial review, any amounts of exemptions allowed and credits allowed and paid from the homestead credit fund including the penalty, if any, become a lien upon the property on which the exemption or credit was originally granted, if still in the hands of the claimant, and not in the hands of a bona fide purchaser, and any amount so erroneously paid including the penalty, if any, shall be collected by the county treasurer in the same manner as other taxes and the collections shall be returned to the department of revenue and credited to the homestead credit fund. The director of revenue may institute legal proceedings against a homestead credit claimant for the collection of payments made on disallowed credits and the penalty, if any. If a person makes a false claim or affidavit with fraudulent intent to obtain the homestead exemption or credit, the person is guilty of a fraudulent practice and the claim shall be disallowed in full. If the credit has been paid, the amount of the credit plus a penalty equal to twenty-five percent of the amount of credit plus interest, at the rate in effect under section 421.7, from the time of payment shall be collected by the county treasurer in the same manner as other property taxes, penalty, and interest are collected and when collected shall be paid to the director of revenue. If a homestead exemption or credit is disallowed and the claimant failed to give written notice to the assessor as required by section 425.2 when the property ceased to be used as a homestead by the claimant, a civil penalty equal to five percent of the amount of the disallowed exemption or credit is assessed against the claimant.
    Sec. 31.  Section 425.8, subsection 1, Code 2026, is amended to read as follows:
   1.  The director of revenue shall prescribe the form for the making of a verified statement and designation of homestead, the form for the supporting affidavits required herein, and such other forms as may be necessary for the proper administration of this subchapter. Whenever necessary, the department of revenue shall forward to the county auditors of the several counties in the state the prescribed sample forms, and the county auditors shall furnish blank forms prepared in accordance therewith with the assessment rolls, books, and supplies delivered to the assessors. The department of revenue shall prescribe and the county auditors shall provide on the forms for claiming the homestead credit exemption a statement to the effect that the owner realizes that the owner must give written notice to the assessor when the owner changes the use of the property.
    Sec. 32.  Section 425.10, Code 2026, is amended to read as follows:
   425.10  Reversal of allowed claim.
   In the event any claim is allowed, and subsequently reversed on appeal, any exemption and credit made under the claim shall be void. The amount of tax resulting from the erroneous credit exemption shall be charged against the property in question, and the director of revenue, the county auditor, and the county treasurer are authorized and directed to correct their books and records accordingly. The amount of the erroneous credit, when collected, shall be returned by the county treasurer to the homestead credit fund to be reallocated the following year as provided in this subchapter. Taxes due following reversal of a claim for an exemption shall be collected by the county treasurer and allocated to the appropriate taxing entities.
    Sec. 33.  Section 425.11, subsection 1, unnumbered paragraph 1, Code 2026, is amended to read as follows:
   For the purpose of this subchapter and wherever used in this subchapter:
    Sec. 34.  Section 425.11, subsection 1, paragraph d, subparagraph (1), unnumbered paragraph 1, Code 2026, is amended to read as follows:
   The homestead includes the dwelling house which the owner, in good faith, is occupying as a home on July 1 of the year for which the credit exemption is claimed and occupies as a home for at least six months during the calendar year in which the fiscal year begins, except as otherwise provided.
    Sec. 35.  Section 425.11, subsection 1, paragraph d, subparagraph (3), Code 2026, is amended to read as follows:
   (3)  It must not embrace more than one dwelling house, but where a homestead has more than one dwelling house situated thereon, the exemption and credit provided for in this subchapter shall apply to the home and buildings used by the owner, but shall not apply to any other dwelling house and buildings appurtenant.
    Sec. 36.  Section 425.11, subsection 1, paragraph e, subparagraph (2), Code 2026, is amended to read as follows:
   (2)  For the purpose of this subchapter, the word “owner” shall be construed to mean a bona fide owner and not one for the purpose only of availing the person of the benefits of this subchapter. In order to qualify for the homestead tax credit and exemption, evidence of ownership shall be on file in the office of the clerk of the district court or recorded in the office of the county recorder at the time the owner files with the assessor a verified statement of the homestead claimed by the owner as provided in section 425.2.
    Sec. 37.  Section 425.12, Code 2026, is amended to read as follows:
   425.12  Indian land.
   Each forty acres of land, or fraction thereof, occupied by a member or members of the Sac and Fox Indians in Tama county, which land is held in trust by the secretary of the interior of the United States for said Indians, shall be given a homestead tax exemption and credit within the meaning and under the provisions of this subchapter. Application for such homestead tax exemption and credit shall be made to the county auditor of Tama county and may be made by a representative of the tribal council.
    Sec. 38.  Section 425.13, Code 2026, is amended to read as follows:
   425.13  Conspiracy to defraud.
   If any two or more persons conspire and confederate together with fraudulent intent to obtain the exemption or credit provided for under the terms of this subchapter by making a false deed, or a false contract of purchase, they are guilty of a fraudulent practice.
    Sec. 39.  Section 425.16, Code 2026, is amended to read as follows:
   425.16  Additional Property tax growth credit.
   1.  a.  In addition to the homestead tax credit exemption allowed under section 425.1, subsections 1 through 4, and the homestead exemption under section 425.1A, if applicable, persons claimants who own or rent their homesteads homestead that has a qualifying actual value and who meet the qualifications provided in this subchapter are eligible for a property tax growth credit for property taxes due or reimbursement of rent constituting property taxes paid.
   b.  For purposes of this section, “qualifying actual value” means one of the following:
   (1)  An actual value of three hundred fifty thousand dollars or less for the applicable assessment year.
   (2)  An actual value that exceeds three hundred fifty thousand dollars for the applicable assessment year and all of the following apply:
   (a)  The actual value of the homestead was equal to or less than three hundred fifty thousand dollars for the first year for which the owner claimed the credit.
   (b)  The increase in the homestead’s actual value since the first-year claim was not the result of improvements, structural replacements, or modifications to the homestead beyond necessary repairs.
   (c)  The owner has claimed the credit for each subsequent year since the first-year claim.
   2.  a.  The property tax growth credit for property taxes due under this subchapter shall be administered by the department of revenue, the assessor, and other county officials as provided in this subchapter.
   b.  The reimbursement of rent constituting property taxes paid under this subchapter shall be administered by the department of health and human services as provided in this subchapter.
   3.  Section 25B.7 shall not apply to the credit under this subchapter.
    Sec. 40.  Section 425.17, Code 2026, is amended to read as follows:
   425.17  Definitions.
   As used in this subchapter, unless the context otherwise requires:
   1.  “Base year” means the calendar year last ending before the claim is filed.
   2.  a.  “Claimant” means any of the following:
   (1)  A person filing a claim for credit under this subchapter who has attained the age of sixty-five years but who has not attained the age of seventy years on or before December 31 of the base year, a person filing a claim for credit or reimbursement under this subchapter who is totally disabled and was totally disabled on or before December 31 of the base year, or a person filing a claim for reimbursement under this subchapter who has attained the age of sixty-five years on or before December 31 of the base year and who is domiciled in this state at the time the claim is filed or at the time of the person’s death in the case of a claim filed by the executor or administrator of the claimant’s estate, if the person received a credit for property taxes due for the homestead under the schedule specified in section 425.23, subsection 1, paragraph “a”, Code 2026, for property taxes due and payable in the fiscal year beginning July 1, 2026, and if the person has filed for the credit under this subchapter for each of the subsequent years, if any.
   (2)  A person filing a claim for credit or reimbursement under this subchapter who has attained the age of twenty-three years on or before December 31 of the base year or was a head of household on December 31 of the base year, as defined in the Internal Revenue Code, but has not attained the age or disability status described in subparagraph (1) or the age status and eligibility criteria of subparagraph (3), and is domiciled in this state at the time the claim is filed or at the time of the person’s death in the case of a claim filed by the executor or administrator of the claimant’s estate, and was not claimed as a dependent on any other person’s tax return for the base year.
   (3)  (2)  A person filing a claim for credit under this subchapter who has attained the age of seventy sixty-five years on or before December 31 of the base year, who has a household income of less than two hundred fifty percent of the federal poverty level, as defined by the most recently revised poverty income guidelines published by the United States department of health and human services, and is domiciled in this state at the time the claim is filed or at the time of the person’s death in the case of a claim filed by the executor or administrator of the claimant’s estate.
   b.  “Claimant” under paragraph “a” includes a vendee in possession under a contract for deed and may include one or more joint tenants or tenants in common. In the case of a claim for rent constituting property taxes paid, the claimant shall have rented the property during any part of the base year. In the case of a claim for property taxes due, the claimant shall have occupied the property during any part of the fiscal year beginning July 1 of the base year. If a homestead is occupied by two or more persons, and more than one person is able to qualify as a claimant, the persons may each file a claim based upon each person’s income and rent constituting property taxes paid or property taxes due.
   3.  “Gross rent” means rental paid at arm’s length for the right of occupancy of a homestead or manufactured or mobile home, including rent for space occupied by a manufactured or mobile home not to exceed one acre. If the department of health and human services determines that the landlord and tenant have not dealt with each other at arm’s length, and the department of health and human services is satisfied that the gross rent charged was excessive, the department of health and human services shall adjust the gross rent to a reasonable amount as determined by the department of health and human services.
   4.  3.  “Homestead” means the dwelling owned or rented and actually used as a home by the claimant during the period specified in subsection 2, and so much of the land surrounding it including one or more contiguous lots or tracts of land, as is reasonably necessary for use of the dwelling as a home, but not exceeding one-half acre, and may consist of a part of a multidwelling or multipurpose building and a part of the land upon which it is built. It does not include personal property except that a manufactured or mobile home may be a homestead. Any dwelling or a part of a multidwelling or multipurpose building which is exempt from taxation, except for an exemption under section 425.1A subchapter I, does not qualify as a homestead under this subchapter. However, solely for purposes of claimants living in a property and receiving reimbursement for rent constituting property taxes paid immediately before the property becomes tax exempt, and continuing to live in it after it becomes tax exempt, the property shall continue to be classified as a homestead. A homestead must be located in this state. When a person is confined in a nursing home, extended-care facility, or hospital, the person shall be considered as occupying or living in the person’s homestead if the person is the owner of the homestead and the person maintains the homestead and does not lease, rent, or otherwise receive profits from other persons for the use of the homestead.
   5.  4.  “Household” means a claimant and the claimant’s spouse if living with the claimant at any time during the base year. “Living with” refers to domicile and does not include a temporary visit.
   6.  “Household income” means all income of the claimant and the claimant’s spouse in a household and actual monetary contributions received from any other person living with the claimant during their respective twelve-month income tax accounting periods ending with or during the base year.
   7.  “Income” means the sum of Iowa net income as defined in section 422.7, plus all of the following to the extent not already included in Iowa net income:  capital gains; alimony; child support money; cash public assistance and relief, except property tax relief granted under this subchapter; amount of in-kind assistance for housing expenses; total amounts received from a governmental or other pension or retirement plan, including defined benefit or defined contribution plans; annuities; individual retirement accounts; plans maintained or contributed to by an employer, or maintained or contributed to by a self-employed person as an employer; deferred compensation plans or any earnings attributable to the deferred compensation plans; income received pursuant to a farm tenancy agreement covering real property; railroad retirement benefits; payments received under the federal Social Security Act, except child insurance benefits received by a member of the claimant’s household; military retirement and veterans’ disability pensions; interest received from a state or federal government or any of its instrumentalities; workers’ compensation; and the gross amount of disability income or “loss of time” insurance. “Income” does not include gifts from nongovernmental sources, or surplus foods or other relief in kind supplied by a governmental agency. In determining income, net operating losses and net capital losses shall not be considered.
   8.  5.  “Property taxes due” means property taxes including any special assessments, but exclusive of delinquent interest and charges for services, due on a claimant’s homestead in this state, but includes only property taxes for which the claimant is liable and which will actually be paid by the claimant. However, if the claimant is a person whose property taxes have been suspended under sections 427.8 and 427.9, “property taxes due” means property taxes including any special assessments, but exclusive of delinquent interest and charges for services, due on a claimant’s homestead in this state, but includes only property taxes for which the claimant is liable and which would have to be paid by the claimant if the payment of the taxes has not been suspended pursuant to sections 427.8 and 427.9. “Property taxes due” shall be computed with no deduction for any credit under this subchapter or for any homestead credit allowed under subchapter I. Each claim shall be based upon the taxes due during the fiscal year next following the base year. If a homestead is owned by two or more persons as joint tenants or tenants in common, and one or more persons are not members of claimant’s household, “property taxes due” is that part of property taxes due on the homestead which equals the ownership percentage of the claimant and the claimant’s household. The county treasurer shall include with the tax receipt a statement that if the owner of the property is eighteen years of age or over, the person may be eligible for the credit allowed under this subchapter. If a homestead is an integral part of a farm, the claimant may use the total property taxes due for the larger unit. If a homestead is an integral part of a multidwelling or multipurpose building the property taxes due for the purpose of this subsection shall be prorated to reflect the portion which the value of the property that the household occupies as its homestead is to the value of the entire structure. For purposes of this subsection, “unit” refers to that parcel of property covered by a single tax statement of which the homestead is a part.
   9.  “Rent constituting property taxes paid” means twenty-three percent of the gross rent actually paid in cash or its equivalent during the base year by the claimant or the claimant’s household solely for the right of occupancy of their homestead in the base year, and which rent constitutes the basis, in the succeeding year, of a claim for reimbursement under this subchapter by the claimant.
   10.  6.  “Special assessment” means an unpaid special assessment certified pursuant to chapter 384, subchapter IV. The claimant may include as a portion of the taxes due during the fiscal year next following the base year an amount equal to the unpaid special assessment installment due, plus interest, during the fiscal year next following the base year.
   11.  7.  “Totally disabled” means the inability to engage in any substantial gainful employment by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or is reasonably expected to last for a continuous period of not less than twelve months.
    Sec. 41.  Section 425.18, Code 2026, is amended to read as follows:
   425.18  Right to file a claim Claim.
   1.  Subject to the limitations provided in this subchapter, a claimant may annually claim a credit for property taxes due during the fiscal year next following the base year.
   2.  The right to file a claim for reimbursement or a credit under this subchapter may be exercised by the claimant or on behalf of a claimant by the claimant’s legal guardian, spouse, or attorney, or by the executor or administrator of the claimant’s estate. If a claimant dies after having filed a claim for reimbursement for rent constituting property taxes paid, the amount of the reimbursement may be paid to another member of the household as determined by the department of health and human services. If the claimant was the only member of the household, the reimbursement may be paid to the claimant’s executor or administrator, but if neither is appointed and qualified within one year from the date of the filing of the claim, the reimbursement shall escheat to the state. If a claimant dies after having filed a claim for credit for property taxes due, the amount of credit for the applicable year of the filed claim shall be paid as if the claimant had not died.
   3.  A claim for credit for property taxes due shall not be allowed unless the claim is filed with the county treasurer between January 1 and June 1, both dates inclusive, immediately preceding the fiscal year during which the property taxes are due. However, in case of sickness, absence, or other disability of the claimant, or if in the judgment of the county treasurer good cause exists, the county treasurer may extend the time for filing a claim for credit through March 31 of the fiscal year during which the property taxes are due.
    Sec. 42.  Section 425.22, Code 2026, is amended to read as follows:
   425.22  One claimant per household.
   Only one claimant per household per year shall be entitled to reimbursement under this subchapter and only one claimant per household per fiscal year shall be entitled to a credit under this subchapter.
    Sec. 43.  Section 425.23, Code 2026, is amended by striking the section and inserting in lieu thereof the following:
   425.23  Amount of credit.
   The amount of the credit under this subchapter shall be the difference between the actual amount of property taxes due on the homestead during the fiscal year next following the base year minus the lesser of the following:
   1.  The actual amount of property taxes due on the homestead during the first fiscal year for which the claimant filed a claim for a credit calculated under this section and for which the property taxes due on the homestead were calculated on an assessed valuation that was not a partial assessment and if the claimant has filed for the credit calculated under this section for each of the subsequent fiscal years after the first credit claimed.
   2.  The actual amount of property taxes due on the homestead during a fiscal year following the first fiscal year for which the claimant filed a claim for a credit calculated under this section and for which the property taxes due on the homestead were calculated on an assessed valuation that was not a partial assessment and if the claimant has filed for the credit calculated under this section for each of the subsequent fiscal years after the first credit claimed.
   3.  The actual amount of property taxes due on the homestead during the first fiscal year for which the claimant filed a claim for a credit calculated under section 425.23, subsection 1, paragraph “c”, subparagraph (2), Code 2026, or prior applicable Code, and for which the property taxes due on the homestead were calculated on an assessed valuation that was not a partial assessment and if the claimant has filed for the credit calculated under section 425.23, subsection 1, paragraph “c”, subparagraph (2), Code 2026, or this section for each of the subsequent fiscal years after the first credit claimed.
    Sec. 44.  Section 425.25, Code 2026, is amended to read as follows:
   425.25  Administration —— claim forms.
   1.  The director of revenue shall make available suitable forms with instructions for claimants of the credit for property taxes due. Each assessor and county treasurer shall make available the forms and instructions. The claim shall be in a form as the director of revenue may prescribe. The director shall also devise a tax credit table, with amounts rounded to the nearest even whole dollar. Credits in the amount of less than one dollar shall not be paid.
   2.  The director of health and human services shall make available suitable forms with instructions for claimants of the reimbursement for rent constituting property taxes paid. The claim shall be in a form as the director of health and human services may prescribe. The director of revenue shall devise a reimbursement table with amounts rounded to the nearest even whole dollar and provide such table to the director of health and human services. Reimbursements in the amount of less than one dollar shall not be paid.
    Sec. 45.  Section 425.26, Code 2026, is amended to read as follows:
   425.26  Proof of claim.
   1.  Every claimant for the credit for property taxes due shall give the department of revenue, in support of the claim, reasonable proof of:
   a.  Age and total disability, if any.
   b.  Property taxes due.
   c.  Homestead credit allowed against property taxes due.
   d.  c.  Changes of homestead.
   e.  d.  Household membership.
   f.  Household income.
   g.  e.  Size and nature of property claimed as the homestead.
   2.  Every claimant for reimbursement of rent constituting property taxes paid shall give the department of health and human services, in support of the claim, reasonable proof of:
   a.  Age and total disability, if any.
   b.  Rent constituting property taxes paid, including the name and address of the owner or manager of the property rented and a statement whether the claimant is related by blood, marriage, or adoption to the owner or manager of the property rented.
   c.  Changes of homestead.
   d.  Household membership.
   e.  Household income.
   f.  Size and nature of property claimed as the homestead.
   3.  2.  The department of revenue or the department of health and human services may require any additional proof necessary to support a claim.
    Sec. 46.  Section 425.27, Code 2026, is amended to read as follows:
   425.27  Audit —— recalculation or denial —— appeals.
   1.  a.  The department of revenue is responsible for the audit of claims for credit of property taxes due under this subchapter.
   b.  The department of health and human services is responsible for the audit of claims for reimbursement for rent constituting property taxes paid under this subchapter.
   2.  If on the audit of a claim for credit under this subchapter, the department of revenue determines the amount of the claim to have been incorrectly calculated or that the claim is not allowable, the department of revenue shall recalculate the claim and notify the claimant of the recalculation or denial and the reasons for it. The recalculation of the claim shall be final unless appealed to the director of revenue within thirty days from the date of notice of recalculation or denial. The director of revenue shall grant a hearing, and upon hearing determine the correct claim, if any, and notify the claimant of the decision by mail. The department of revenue shall not adjust a claim after three years from October 31 of the year in which the claim was filed. If the claim for credit has been paid allowed, the department of revenue shall give notification to the claimant and the county treasurer of the recalculation or denial of the claim and the county treasurer shall proceed to collect the tax owed in the same manner as other property taxes due and payable are collected, if the property on which the credit was granted is still owned by the claimant, and repay the amount to the director upon collection. If the property on which the credit was granted is not owned by the claimant, the amount may be recovered from the claimant by assessment in the same manner that income taxes are assessed under sections 422.26 and 422.30. The decision of the director of revenue shall be final unless appealed as provided in section 425.31.
   3.  If on the audit of a claim for reimbursement for rent constituting property taxes paid under this subchapter, the department of health and human services determines the amount of the claim to have been incorrectly calculated or that the claim is not allowable, the department of health and human services shall recalculate the claim and notify the claimant of the recalculation or denial and the reasons for it. The recalculation of the claim shall be final unless appealed to the director of health and human services within thirty days from the date of notice of recalculation or denial. The director of health and human services shall grant a hearing, and upon hearing determine the correct claim, if any, and notify the claimant of the decision by mail. The department of health and human services shall not adjust a claim after three years from October 31 of the year in which the claim was filed. If the claim for reimbursement has been paid, the amount may be recovered by the department of health and human services. The decision of the director of health and human services shall be final unless appealed as provided in section 425.31.
   4.  a.  3.  For the purpose of administering the credit for property taxes due, including the duties of the director of revenue and the department of revenue, section 422.70 is applicable with respect to this subchapter.
   b.  For the purpose of administering the reimbursement for rent constituting property taxes paid, including the duties of the director of health and human services and the department of health and human services under this subchapter, the director of health and human services shall have the same powers as those described in section 422.70.
    Sec. 47.  Section 425.29, Code 2026, is amended to read as follows:
   425.29  False claim —— penalty.
   1.  A person who makes a false affidavit for the purpose of obtaining a credit or reimbursement provided for in under this subchapter or who knowingly receives the credit or reimbursement without being legally entitled to it or makes claim for the credit or reimbursement in more than one county in the state without being legally entitled to it is guilty of a fraudulent practice. The claim for credit or reimbursement shall be disallowed in full and if the claim has been paid the amount shall be recovered in the manner provided in section 425.27.
   2.  In the case of a claim for credit disallowed by the department of revenue, the department of revenue may impose penalties under section 421.27. The department of revenue shall send a notice of disallowance of the claim.
   3.  In the case of a claim for reimbursement disallowed by the department of health and human services, the department of health and human services may impose penalties described in section 421.27. The department of health and human services shall send a notice of disallowance of the claim.
    Sec. 48.  Section 425.30, Code 2026, is amended to read as follows:
   425.30  Notices.
   1.  A notice authorized or required under this subchapter related to a credit for property taxes due may be given by mailing the notice to the person for whom it is intended, addressed to that person at the address given in the last credit claim form filed by the person pursuant to this subchapter, or if no return has been filed, then to any address obtainable.
   2.  A notice authorized or required under this subchapter related to a reimbursement for rent constituting property taxes paid may be given by mailing the notice to the person for whom it is intended, addressed to that person at the address given in the reimbursement claim form filed by the person pursuant to this subchapter, or if no return has been filed, then to any address obtainable.
   3.  2.  The mailing of the notice is presumptive evidence of the receipt of the notice by the person to whom addressed. Any period of time which is determined according to this subchapter by the giving of notice commences to run from the date of mailing of the notice.
    Sec. 49.  Section 425.31, Code 2026, is amended to read as follows:
   425.31  Appeals.
   1.  Judicial review of the actions of the director of revenue or the department of revenue under this subchapter may be sought in accordance with the terms of chapter 17A and the rules of the department of revenue.
   2.  Judicial review of the actions of the director of health and human services or the department of health and human services under this subchapter may be sought in accordance with the terms of chapter 17A and the rules of the department of health and human services.
   3.  2.  For cause and upon a showing by the director of revenue or the director of health and human services, as applicable, that collection of the amount in dispute is in doubt, the court may order the petitioner to file with the clerk a bond for the use of the respondent, with sureties approved by the clerk, equal to the amount appealed from, conditioned that the petitioner shall perform the orders of the court.
   4.  3.  An appeal may be taken by the claimant or the director of revenue or the director of health and human services, as applicable, to the supreme court of this state irrespective of the amount involved.
    Sec. 50.  Section 425.32, Code 2026, is amended to read as follows:
   425.32  Disallowance of certain claims for credit.
   A claim for credit for property taxes due shall be disallowed if the department of revenue finds that the claimant or a person of the claimant’s household received title to the homestead primarily for the purpose of receiving benefits under this subchapter.
    Sec. 51.  Section 425.37, Code 2026, is amended to read as follows:
   425.37  Rules.
   The director of revenue and the director of health and human services shall each adopt rules in accordance with chapter 17A for the interpretation and proper administration of this subchapter and each department’s applicable powers and duties under this subchapter, including rules to prevent and disallow duplication of benefits and to prevent any unreasonable hardship or advantage to any person.
    Sec. 52.  Section 427.9, Code 2026, is amended to read as follows:
   427.9  Suspension of taxes, assessments, and rates or charges, including interest, fees, and costs.
   If a person is a recipient of federal supplementary security income or state supplementary assistance, as defined in section 249.1, or is a resident of a health care facility, as defined by section 135C.1, which is receiving payment from the department of health and human services for the person’s care, the person shall be deemed to be unable to contribute to the public revenue. The director of health and human services shall notify a person receiving such assistance of the tax suspension provision and shall provide the person with evidence to present to the appropriate county board of supervisors which shows the person’s eligibility for tax suspension on parcels owned, possessed, or upon which the person is paying taxes as a purchaser under contract. The board of supervisors so notified, without the filing of a petition and statement as specified in section 427.8, shall order the county treasurer to suspend the collection of all the taxes, special assessments, and rates or charges, including interest, fees, and costs, assessed against the parcels and remaining unpaid by the person or contractually payable by the person, for such time as the person remains the owner or contractually prospective owner of the parcels, and during the period the person receives assistance as described in this section. The county board of supervisors shall annually send to the department of health and human services the names and social security numbers of persons receiving a tax suspension pursuant to this section. The department shall verify the continued eligibility for tax suspension of each name on the list and shall return the list to the board of supervisors. The director of health and human services shall advise the person that the person may apply for an additional property tax credit pursuant to sections 425.16 through 425.37 which shall be credited against the amount of the taxes suspended.
    Sec. 53.  Section 435.22, subsection 1, paragraph b, subparagraphs (2) and (3), Code 2026, are amended to read as follows:
   (2)  For purposes of this paragraph “b”, “income” means income as defined in section 425.17, subsection 7, Code 2026, and “base year” means the calendar year preceding the year in which the claim for a reduced rate of tax is filed. The home reduced rate of tax shall only be allowed on the home in which the claimant is residing at the time the claim for a reduced rate of tax is filed or was residing at the time of the claimant’s death in the case of a claim filed on behalf of a deceased claimant by the claimant’s legal guardian, spouse, or attorney, or by the executor or administrator of the claimant’s estate.
   (3)  Beginning with the 1998 base year, the income dollar amounts set forth in this paragraph “b” shall be multiplied by the cumulative adjustment factor for that base year as determined in section 425.23, subsection 4, Code 2026.
    Sec. 54.  Section 435.22, subsection 4, Code 2026, is amended by striking the subsection.
    Sec. 55.  Section 435.26, subsection 1, paragraph a, Code 2026, is amended to read as follows:
   a.  A mobile home or manufactured home which is located outside a manufactured home community or mobile home park shall be converted to real estate by being placed on a permanent foundation and shall be assessed for real estate taxes. A home, after conversion to real estate, is eligible for the homestead tax exemption and credit and the military service tax exemption as provided in chapter 425, subchapter I, and section 426A.11. A taxable mobile home or manufactured home which is located outside of a manufactured home community or mobile home park as of January 1, 1995, is also exempt from the permanent foundation requirements of this chapter until the home is relocated.
    Sec. 56.  Section 435.26A, subsection 3, Code 2026, is amended to read as follows:
   3.  After the surrender of a manufactured home’s certificate of title under this section, the manufactured home shall continue to be taxed under section 435.22 and is not eligible for the homestead tax exemption and credit or the military service tax exemption and credit. A foreclosure action on a manufactured home whose title has been surrendered under this section shall be conducted as a real estate foreclosure. A tax lien and its priority shall remain the same on a manufactured home after its certificate of title has been surrendered.
    Sec. 57.  Section 441.21, subsection 1, paragraph i, subparagraph (4), Code 2026, is amended to read as follows:
   (4)  By January 1 of the assessment year following the calendar year in which the plan was submitted to the department, the conference board shall submit a report to the department indicating that the plan of action was followed and compliance has been achieved. The department may conduct a field inspection to ensure that the assessor is in compliance. By January 31, the department shall notify the assessor and the conference board, by restricted certified mail, either that compliance has been achieved or that the assessor remains in noncompliance. If the department determines that the assessor remains in noncompliance, the department shall take steps to withhold up to five percent of the reimbursement payment authorized in section 425.1 until the department of revenue determines that the assessor is in compliance.
    Sec. 58.  Section 441.73, subsection 4, Code 2026, is amended to read as follows:
   4.  The executive council shall transfer for the fiscal year beginning July 1, 1992, and each fiscal year thereafter, from funds the fund established in sections 425.1 and section 426.1, an amount necessary to pay litigation expenses. The amount of the fund for each fiscal year shall not exceed seven hundred thousand dollars. The executive council shall determine annually the proportionate amounts to be transferred from the two separate funds. At any time when no litigation is pending or in progress the balance in the litigation expense fund shall not exceed one hundred thousand dollars. Any excess moneys shall be transferred in a proportionate amount back to the funds from which they were originally transferred.
    Sec. 59.  Section 483A.24, subsection 20, Code 2026, is amended to read as follows:
   20.  Upon payment of a fee established by rules adopted pursuant to section 483A.1 for a lifetime trout fishing license, the department shall issue a lifetime trout fishing license to a person who is at least sixty-five years of age or to a person who qualifies for the disabled veteran homestead credit exemption as a disabled veteran under section 425.15 425.1. The department shall prepare an application to be used by a person requesting a lifetime trout fishing license under this subsection.
    Sec. 60.  REPEAL.  Sections 425.1A, 425.9, 425.15, 425.19, 425.20, 425.21, 425.24, 425.28, 425.33, 425.34, 425.35, 425.36, 425.39, 425.40, and 435.33, Code 2026, are repealed.
    Sec. 61.  ELDERLY AND DISABLED RENT REIMBURSEMENT PROGRAM —— APPROPRIATION.
   1.  The department of health and human services shall establish and administer a program for the reimbursement of rent constituting property taxes paid, as defined in section 425.17, subsection 9, Code 2026, for rents paid by eligible claimants in calendar years beginning on or after January 1, 2027. The department shall administer the program under the provisions of chapter 425, subchapter II, Code 2026, including determinations of eligibility and calculations of reimbursement amounts, as if the program under that subchapter and any rules adopted to implement or administer the program were in effect.
   2.  There is appropriated for fiscal years beginning on or after July 1, 2026, from the general fund of the state to the department of health and human services, an amount necessary to establish and administer the program under subsection 1.
    Sec. 62.  IMPLEMENTATION —— ADDITIONAL LEGISLATION.  

Following the effective date of this division of this Act, the department of revenue shall review other provisions of law to determine if additional changes are necessary to implement this division of this Act and, if necessary, shall submit legislation to the ways and means committees of the senate and house of representatives not later than January 1, 2027.
    Sec. 63.  SAVINGS PROVISION.  This division of the Act does not affect the operation of, or prohibit the application of, prior provisions of the Code sections amended by this division of this Act, or rules adopted under chapter 17A to administer such prior provisions, for assessment years beginning before January 1, 2026, for property taxes due and payable in fiscal years beginning before July 1, 2027, or for reimbursement of rent constituting property taxes paid for amounts paid by the claimant in calendar years beginning before January 1, 2027, including appropriations made therefor.
    Sec. 64.  RETROACTIVE APPLICABILITY.  This division of this Act applies retroactively to assessment years beginning on or after January 1, 2026, for property taxes due and payable in fiscal years beginning on or after July 1, 2027.
DIVISION IV
SECURE AN ADVANCED VISION FOR EDUCATION FUND —— EQUITY TRANSFER PERCENTAGE

    Sec. 65.  Section 423F.2, subsection 3, paragraph b, subparagraph (2), subparagraph division (b), Code 2026, is amended to read as follows:
   (b)  For each fiscal year beginning on or after July 1, 2020, but before July 1, 2026, the equity transfer percentage is equal to the equity transfer percentage for the immediately preceding fiscal year, unless the amount of moneys available in the secure an advanced vision for education fund in the immediately preceding fiscal year equals or exceeds one hundred two percent of the amount of moneys available in the fund for the fiscal year prior to the immediately preceding fiscal year, in which case the equity transfer percentage shall be the equity transfer percentage for the immediately preceding fiscal year plus one percent subject to the limitation in subparagraph division (c).
    Sec. 66.  Section 423F.2, subsection 3, paragraph b, subparagraph (2), subparagraph division (c), Code 2026, is amended by striking the subparagraph division and inserting in lieu thereof the following:
   (c)  (i)  For the fiscal year beginning July 1, 2026, the equity transfer percentage is fifteen percent.
   (ii)  For the fiscal year beginning July 1, 2027, the equity transfer percentage is twenty percent.
   (iii)  For the fiscal year beginning July 1, 2028, the equity transfer percentage is twenty-five percent.
   (iv)  For the fiscal year beginning July 1, 2029, and each fiscal year thereafter, the equity transfer percentage is thirty percent.
    Sec. 67.  SCHOOL DISTRICT FUNDING RECONCILIATION.  

For amounts allocated under section 423F.2 for fiscal years beginning on or after July 1, 2026, the department of management shall adjust or reconcile actual amounts to be received by school districts in the fiscal year immediately following the fiscal year during which the revenues were collected.
DIVISION V
PROPERTY PARCEL INFORMATION

    Sec. 68.  Section 331.510, Code 2026, is amended by adding the following new subsection:
   NEW SUBSECTION.  5.  a.  An annual report not later than January 1 to the department of management containing parcel-level property data, including parcel identification information, location, size, valuation, classification, types of structures and improvements, exemptions, credits, historical amounts of property taxes due and payable, and whether the parcel is subject to a division of revenue.
   b.  In addition to the information required under paragraph “a”, the department of management may require additional parcel-level data deemed necessary by the director of the department of management. The department shall prescribe the form and manner of submitting the annual report under this subsection.
DIVISION VI
URBAN RENEWAL AND URBAN REVITALIZATION

    Sec. 69.  Section 403.2, Code 2026, is amended by striking the section and inserting in lieu thereof the following:
   403.2  Declaration of policy.
   It is hereby found and declared that the powers conferred by this chapter are for public uses and public purposes for which public moneys may be expended and for which the power of eminent domain, to the extent authorized, and police power exercised; and that the necessity in the public interest for the provisions herein enacted is hereby declared as a matter of legislative determination.
    Sec. 70.  Section 403.3, Code 2026, is amended by striking the section and inserting in lieu thereof the following:
   403.3  Municipal program.
   The local governing body of a municipality may formulate for the municipality a workable program for utilizing appropriate private and public resources to eliminate slums and prevent the development or spread of slums and urban blight and to encourage needed urban rehabilitation.
    Sec. 71.  Section 403.5, subsection 2, paragraph b, subparagraph (1), Code 2026, is amended to read as follows:
   (1)  Prior to its approval of an urban renewal plan which provides for a division of revenue pursuant to section 403.19, the municipality shall mail the proposed plan by regular mail to the affected taxing entities. The municipality shall include with the proposed plan notification of a consultation to be held between the municipality and affected taxing entities prior to the public hearing on the urban renewal plan.  If For urban renewal plans and projects approved before the effective date of this division of this Act, if the proposed urban renewal plan or proposed urban renewal project within the urban renewal area includes the use of taxes resulting from a division of revenue under section 403.19 for a public building, including but not limited to a police station, fire station, administration building, swimming pool, hospital, library, recreational building, city hall, or other public building that is exempt from taxation, including the grounds of, and the erection, equipment, remodeling, or reconstruction of, and additions or extensions to, such a building, the municipality shall include with the proposed plan notification an analysis of alternative development options and funding for the urban renewal area or urban renewal project and the reasons such options would be less feasible than the proposed urban renewal plan or proposed urban renewal project. A copy of the analysis required in this subparagraph shall be included with the urban renewal report required under section 331.403 or 384.22, as applicable, and filed by December 1 following adoption of the urban renewal plan or project.
    Sec. 72.  Section 403.5, subsection 4, paragraph b, subparagraph (1), unnumbered paragraph 1, Code 2026, is amended to read as follows:
   The urban renewal plan conforms to the general plan of the municipality as a whole; provided, that for urban renewal plans and projects approved before the effective date of this division of this Act, if the urban renewal area consists of an area of open land to be acquired by the municipality, such area shall not be so acquired except:
    Sec. 73.  Section 403.6, unnumbered paragraph 1, Code 2026, is amended to read as follows:
   The provisions of this chapter shall be liberally interpreted to achieve the purposes of this chapter. Every Subject to the limitations for urban renewal projects under section 403.17, subsection 25, every municipality shall have all the powers necessary or convenient to carry out and effectuate the purposes and provisions of this chapter, including the following powers in addition to others herein granted:
    Sec. 74.  Section 403.9, subsection 1, Code 2026, is amended to read as follows:
   1.  A Subject to the limitations of section 403.18A, a municipality shall have power to periodically issue bonds in its discretion to pay the costs of carrying out the purposes and provisions of this chapter, including but not limited to the payment of principal and interest upon any advances for surveys and planning, and the payment of interest on bonds, authorized under this chapter, not to exceed three years from the date the bonds are issued. The municipality shall have power to issue refunding bonds for the payment or retirement of such bonds previously issued by the municipality, subject to the limitations of section 403.18A. Said bonds shall be payable solely from the income and proceeds of the fund and portion of taxes referred to in section 403.19, subsection 2, and revenues and other funds of the municipality derived from or held in connection with the undertaking and carrying out of urban renewal projects under this chapter. The municipality may pledge to the payment of the bonds the fund and portion of taxes referred to in section 403.19, subsection 2, and may further secure the bonds by a pledge of any loan, grant, or contribution from the federal government or other source in aid of any urban renewal projects of the municipality under this chapter, or by a mortgage of any such urban renewal projects, or any part thereof, title which is vested in the municipality.
    Sec. 75.  Section 403.12, subsection 1, unnumbered paragraph 1, Code 2026, is amended to read as follows:
   For the purpose of aiding in the planning, undertaking or carrying out of an urban renewal project, subject to the limitations for urban renewal projects under section 403.17, subsection 25, located within the area in which it is authorized to act, any public body may, upon such terms, with or without consideration, as it may determine:
    Sec. 76.  Section 403.17, subsection 25, Code 2026, is amended to read as follows:
   25.  a.  “Urban renewal project” For urban renewal projects approved before the effective date of this division of this Act, “urban renewal project” may include undertakings and activities of a municipality in an urban renewal area for the elimination and for the prevention of the development or spread of slums and blight, may include the designation and development of an economic development area in an urban renewal area, and may involve slum clearance and redevelopment in an urban renewal area, or rehabilitation or conservation in an urban renewal area, or any combination or part thereof in accordance with an urban renewal program. The undertakings and activities may include:
   a.  (1)  Acquisition of a slum area, blighted area, economic development area, or portion of the areas;
   b.  (2)  Demolition and removal of buildings and improvements;
   c.  (3)  Installation, construction, or reconstruction of streets, utilities, parks, playgrounds, and other improvements necessary for carrying out in the urban renewal area the urban renewal objectives of this chapter in accordance with the urban renewal plan;
   d.  (4)  Disposition of any property acquired in the urban renewal area, including sale, initial leasing, or retention by the municipality itself, at its fair value for uses in accordance with the urban renewal plan;
   e.  (5)  Carrying out plans for a program of voluntary or compulsory repair and rehabilitation of buildings or other improvements in accordance with the urban renewal plan;
   f.  (6)  Acquisition of any other real property in the urban renewal area, where necessary to eliminate unhealthful, insanitary, or unsafe conditions, or to lessen density, eliminate obsolete or other uses detrimental to the public welfare, or otherwise to remove or prevent the spread of blight or deterioration, or to provide land for needed public facilities;
   g.  (7)  Sale and conveyance of real property in furtherance of an urban renewal project;
   h.  (8)  Expenditure of proceeds of bonds issued before October 7, 1986, for the construction of parking facilities on city blocks adjacent to an urban renewal area.
   b.  For urban renewal projects approved on or after the effective date of this division of this Act, “urban renewal project” shall include only the following undertakings and activities:
   (1)  Acquisition of a portion of a property slum area, blighted area, or economic development area to be used for the installation, construction, or reconstruction of utilities or streets that directly serve the area if the utilities or streets are necessary for furtherance of the urban renewal plan.
   (2)  Demolition and removal of buildings and improvements located on the portion of property described in subparagraph (1).
   (3)  Sale of public property within the urban renewal area for uses in accordance with the urban renewal plan.
    Sec. 77.  NEW SECTION.  403.18A  Division of revenue ordinances duration —— limitations.
   1.  An ordinance providing for a division of revenue under section 403.19 adopted before the effective date of this division of this Act and that is not limited in duration under section 403.17, subsection 10, or section 403.22, subsection 5, shall be subject to the duration limitation in subsection 2.
   2.  a.  A division of revenue ordinance described in subsection 1 may continue in effect under this chapter until such time that the urban renewal area is dissolved by the municipality, the ordinance is repealed by the municipality, or the ordinance terminates under the conditions of paragraph “c”, whichever occurs first.
   b.  A municipality shall not incur additional indebtedness including loans, advances, and bonds, payable from the special fund created in section 403.19 using revenue resulting from the ordinance described under subsection 1 on or after the effective date of this division of this Act. For the purposes of this paragraph “b”, the refinancing of indebtedness incurred prior to the effective date of this division of this Act shall not constitute an additional indebtedness, unless such refinancing results in an increase in the amount of debt service that qualifies for payment from the special fund or extends the term for payment or retirement of the indebtedness.
   c.  An ordinance described in subsection 1 providing for a division of revenue shall terminate and be of no further force and effect at the conclusion of the fiscal year during which the retirement or payment of all indebtedness payable from such division of revenue in existence on the effective date of this division of this Act occurs.
   d.  An ordinance described in subsection 1 or any applicable urban renewal area shall not be amended on or after the effective date of this division of this Act to include territory that is not subject to the ordinance on the effective date of this division of this Act.
   3.  The duration limits under this section and the limitations on the duration of ordinances providing for a division of revenue under section 403.19, subsection 3A, shall not apply to divisions of taxes established by community colleges under chapter 260E or rural improvement zones under chapter 357H.
   4.  The department of management may adopt rules pursuant to chapter 17A necessary to implement and administer this section.
    Sec. 78.  Section 403.19, subsection 3, Code 2026, is amended to read as follows:
   3.  The portion of taxes mentioned in subsection 2 and the special fund into which they shall be paid, may be irrevocably pledged by a municipality for the payment of the principal and interest on loans, advances, bonds issued under the authority of section 403.9, subsection 1, or indebtedness incurred by a municipality to finance or refinance, in whole or in part, the urban renewal project within the area.  Costs of an urban renewal project, including bonds, loans, advances, or other indebtedness incurred on or after the effective date of this division of this Act and payable from the special fund created in subsection 2 shall only be paid from the portion of taxes mentioned in subsection 2 resulting from that portion of the urban renewal area governed by the ordinance where the urban renewal project is located.
    Sec. 79.  Section 403.19, Code 2026, is amended by adding the following new subsection:
   NEW SUBSECTION.  3A.  An ordinance providing for a division of revenue under this section that is adopted on or after the effective date of this division of this Act shall be limited to twenty years from the calendar year following the calendar year in which the municipality first certifies to the county auditor the amount of any loans, advances, indebtedness, or bonds that qualify for payment from the division of revenue provided for in this section. The ordinance shall terminate and be of no further force and effect following the twenty-year period provided in this subsection.
    Sec. 80.  Section 403.19, subsection 10, Code 2026, is amended by adding the following new paragraph:
   NEW PARAGRAPH.  c.  Moneys from any source deposited into the special fund created in this section shall not be expended for or otherwise used in connection with an urban renewal project approved on or after the effective date of this division of this Act, that does not meet the definition of “urban renewal project” under section 403.17, subsection 25, paragraph “b”.
    Sec. 81.  Section 403.22, subsection 1, unnumbered paragraph 1, Code 2026, is amended to read as follows:
   With respect to any urban renewal area established upon the determination that the area is an economic development area before the effective date of this division of this Act, a division of revenue as provided in section 403.19 shall not be allowed for the purpose of providing or aiding in the provision of public improvements related to housing and residential development, unless the municipality assures that the project will include assistance for low and moderate income family housing. 
    Sec. 82.  Section 404.3D, Code 2026, is amended to read as follows:
   404.3D  Exemptions for residential property.
   1.  For revitalization areas established under this chapter on or after July 1, 2024, and for first-year exemption applications for property located in a revitalization area in existence on July 1, 2024, filed on or after July 1, 2024, an exemption authorized under this chapter for property that is residential property shall not apply to property tax levies imposed by a school district.
   2.  In addition to the inapplicability of the exemption to school district property tax levies specified under subsection 1, for property taxes due and payable in fiscal years beginning on or after July 1, 2027, if such a property receiving an exemption is located in both a revitalization area and an urban renewal area, the school district property taxes on the property shall not be subject to the division of revenue under section 403.19 and when collected shall be paid to the school district.
    Sec. 83.  EFFECTIVE DATE.  This division of this Act, being deemed of immediate importance, takes effect upon enactment.
DIVISION VII
ASSESSMENT FREQUENCY AND PROCEDURES

    Sec. 84.  Section 427A.1, subsection 9, Code 2026, is amended to read as follows:
   9.  The assessing authority shall annually reassess property which is assessed and taxed as real property, but which would be regarded as personal property except for this section, on the same schedule as the reassessment schedule for real property. This section shall not be construed to limit the assessing authority’s powers to assess or reassess under other provisions of law.
    Sec. 85.  Section 428.4, subsection 1, Code 2026, is amended to read as follows:
   1.  Property shall be assessed for taxation each year. Real estate shall be listed and assessed in 1981 2025 and every two three years thereafter. The assessment of real estate shall be the value of the real estate as of January 1 of the year of the assessment. The year 1981 2025 and each odd-numbered third year thereafter shall be a reassessment year. In any year, the two assessment years immediately after the reassessment year in which an assessment has been made of all the real estate in an assessing jurisdiction, the assessor shall value and assess or revalue and reassess, as the case may require, any real estate that the assessor finds was incorrectly valued or assessed, or was not listed, valued, and assessed, in the assessment year immediately preceding, also any real estate the assessor finds has changed in value subsequent to January 1 of the preceding real estate assessment year. However, a percentage increase on a class of property shall not be made in a year not subject to an equalization order unless ordered by the department of revenue. The assessor shall determine the actual value and compute the taxable value thereof as of January 1 of the year of the revaluation and reassessment. The assessment shall be completed as specified in section 441.28, but no reduction or increase in actual value shall be made for prior years. If an assessor makes a change in the valuation of the real estate as provided for, sections 441.23, 441.37, 441.37A, 441.37B, and 441.38 apply.
    Sec. 86.  Section 441.21, subsection 3, Code 2026, is amended to read as follows:
   3.  a.  “Actual value”, “taxable value”, or “assessed value” as used in other sections of the Code in relation to assessment of property for taxation shall mean the valuations as determined by this section; however, other provisions of the Code providing special methods or formulas for assessing or valuing specified property shall remain in effect, but this section shall be applicable to the extent consistent with such provisions. The assessor and department of revenue shall disclose at the written request of the taxpayer all information in any formula or method used to determine the actual value of the taxpayer’s property.  In addition, for assessment years beginning on or after January 1, 2027, if the taxpayer’s property has increased in actual value by fifteen percent or more from the immediately preceding reassessment year under section 428.4, or the most recent assessment year following such reassessment year if the property was revalued or reassessed in that assessment year, the assessor shall provide the taxpayer with a statement of the reasons for the increase in actual value, information specifying the portion of actual value increase attributable to a change in classification, revaluation, new construction, improvements, or renovations to the property, and all information in any formula or method used to determine the actual value.
   b.  (1)  For assessment years beginning before January 1, 2018, the burden of proof shall be upon any complainant attacking such valuation as excessive, inadequate, inequitable, or capricious. However, in protest or appeal proceedings when the complainant offers competent evidence by at least two disinterested witnesses that the market value of the property is less than the market value determined by the assessor, the burden of proof thereafter shall be upon the officials or persons seeking to uphold such valuation to be assessed.
   (2)  (1)  For assessment years beginning on or after January 1, 2018, the Except as provided in subparagraph (3), the burden of proof shall be upon any complainant attacking such valuation as excessive, inadequate, inequitable, or capricious. However, in protest or appeal proceedings when the complainant offers competent evidence that the market value of the property is different than the market value determined by the assessor, the burden of proof thereafter shall be upon the officials or persons seeking to uphold such valuation to be assessed.
   (3)  (2)  If the classification of a property has been previously adjudicated by the property assessment appeal board or a court as part of an appeal under this chapter, there is a presumption that the classification of the property has not changed for each of the four subsequent assessment years, unless a subsequent such adjudication of the classification of the property has occurred, and the burden of demonstrating a change in use shall be upon the person asserting a change to the property’s classification.
   (3)  For assessment years beginning on or after January 1, 2027, if the taxpayer’s property actual value increased by fifteen percent or more from the immediately preceding reassessment year under section 428.4, or the most recent assessment year following such reassessment year if the property was revalued or reassessed in that assessment year, including an increase as the result of an equalization order, and the property did not change classification or primary use and the increase in actual value is not the result of new construction, improvements, or renovations to the property, the actual value so determined by the assessor is not presumed to be the actual value and in any protest or appeal the assessor shall have the burden of proof that the valuation is not excessive, inadequate, inequitable, or capricious.
    Sec. 87.  Section 441.23, Code 2026, is amended to read as follows:
   441.23  Notice Periodic assessment —— notice of valuation.
   1.  The periodic assessment and reassessment of property shall be determined as provided in section 428.4.
   2.  If there has been an increase or decrease in the valuation of the property, or upon the written request of the person assessed, the assessor shall, at the time of making the assessment, inform the person assessed, in writing, of the valuation put upon the taxpayer’s property, and notify the person, that if the person feels aggrieved, to contact the assessor pursuant to section 441.30 or to appear before the board of review and show why the assessment should be changed. However, if the valuation of a class of property is uniformly decreased, the assessor may notify the affected property owners by publication in the official newspapers of the county. The owners of real property shall be notified not later than April 1 of any adjustment of the real property assessment.
    Sec. 88.  Section 441.26, subsection 2, Code 2026, is amended to read as follows:
   2.  The notice in each odd-numbered equalization year, as determined under section 441.49, shall contain a statement that the assessments are subject to equalization pursuant to an order issued by the department of revenue, that the county auditor shall give notice on or before October 8 by publication in an official newspaper of general circulation to any class of property affected by the equalization order, that the county auditor shall give notice by mail postmarked on or before October 8 to each property owner or taxpayer whose valuation has been increased by the equalization order, and that the board of review shall be in session from October 10 to November 15 to hear protests of affected property owners or taxpayers whose valuations have been adjusted by the equalization order.
    Sec. 89.  Section 441.28, Code 2026, is amended to read as follows:
   441.28  Assessment rolls —— change —— notice to taxpayer.
   The Subject to section 428.4, the assessment shall be completed not later than April 1 each year. If the assessor makes any change in an assessment after it has been entered on the assessor’s rolls, the assessor shall note on the roll, together with the original assessment, the new assessment and the reason for the change, together with the assessor’s signature and the date of the change. Provided, however, in the event the assessor increases any assessment the assessor shall give notice of the increase in writing to the taxpayer by mail postmarked no later than April 1. No changes shall be made on the assessment rolls after April 1 except by written agreement of the taxpayer and assessor under section 441.30, by order of the board of review or of the property assessment appeal board, or by decree of court.
    Sec. 90.  Section 441.33, Code 2026, is amended by adding the following new subsection:
   NEW SUBSECTION.  3.  Ex parte communications with board of review members are prohibited in protests before the board.
    Sec. 91.  Section 441.35, subsection 2, Code 2026, is amended to read as follows:
   2.  In any year either of the two years after the year in which an assessment has been made of all of the real estate in any taxing district as determined under section 428.4, the board of review shall meet as provided in section 441.33, and where the board finds the same has changed in value, the board shall revalue and reassess any part or all of the real estate contained in such taxing district, and in such case, the board shall determine the actual value as of January 1 of the year of the revaluation and reassessment and compute the taxable value thereof. If the assessment of any such property is raised, or any property is added to the tax list by the board, the clerk shall give notice in the manner provided in section 441.36. If all property in any taxing district is revalued and reassessed, the board shall, in addition to notices required to be provided in the manner specified in section 441.36, instruct the clerk to give immediate notice by one publication in one of the official newspapers located in the taxing district. The decision of the board as to the foregoing matters shall be subject to appeal to the property assessment appeal board within the same time and in the same manner as provided in section 441.37A and to the district court within the same time and in the same manner as provided in section 441.38.
    Sec. 92.  Section 441.47, unnumbered paragraph 1, Code 2026, is amended to read as follows:
   The department of revenue on or about August 15, 1977 2027, and every two three years thereafter shall order the equalization of the levels of assessment of each class of property in the several assessing jurisdictions by adding to or deducting from the valuation of each class of property such percentage in each case as may be necessary to bring the same to its taxable value as fixed in this chapter, chapters 427 through 440, and chapter 443. The department shall adjust to actual value the valuation of any class of property as set out in the abstract of assessment when the valuation is at least five percent above or below actual value as determined by the department. For purposes of such value adjustments and before such equalization the director shall adopt, in the manner prescribed by chapter 17A, such rules as may be necessary to determine the level of assessment for each class of property in each county. The rules shall cover:
    Sec. 93.  Section 441.49, subsection 2, paragraph a, Code 2026, is amended to read as follows:
   a.  On or before October 8 the county auditor shall cause to be published in official newspapers of general circulation the final equalization order. The county auditor shall also notify each property owner or taxpayer whose valuation has been increased by the final equalization order by mail postmarked on or before October 8. The publication and the individual notice mailed to each property owner or taxpayer whose valuation has been increased shall include, in type larger than the remainder of the publication or notice, the following statements:
  Assessed values are equalized by the department of revenue every two three years. Local taxing authorities determine the final tax levies and may reduce property tax rates to compensate for any increase in valuation due to equalization. If you are not satisfied that your assessment as adjusted by the equalization order is correct, you may file a protest against such assessment with the board of review on or after October 9, to and including October 31.
    Sec. 94.  IMPLEMENTATION —— ADDITIONAL LEGISLATION.  

Following the effective date of this division of this Act, the department of revenue shall review other provisions of law to determine if additional changes are necessary to implement the change in timing of periodic assessments enacted in this division of this Act and, if necessary, shall submit legislation to the ways and means committees of the senate and house of representatives not later than January 1, 2027.
DIVISION VIII
LOCAL GOVERNMENT SHARED-SERVICES GRANT PROGRAM

    Sec. 95.  NEW SECTION.  28E.20  Local government shared-services grant program.
   1.  A local government shared-services grant fund is created and established as a separate and distinct fund in the state treasury under the control of the economic development authority. For purposes of this section, “local government” means a county, city, township, or any special-purpose district or authority.
   2.  a.  In addition to moneys deposited in the local government shared-services grant fund pursuant to appropriations made by the general assembly, the economic development authority may accept gifts, grants, bequests, and other private contributions, as well as state or federal funds, and shall deposit the moneys in the fund to be used for purposes of this section. Moneys in the fund are appropriated to the economic development authority and shall be used only to provide grants to local governments to assist in efforts to consolidate government positions and pursue agreements with other local governments to share services and reduce the use of property tax revenues for such shared services. Grant funds may be used by the local government for costs to implement service-sharing or service-consolidation initiatives and transitional or temporary costs of eliminating services.
   b.  Notwithstanding section 8.33, moneys in the fund that remain unawarded at the close of the fiscal year shall not revert but shall remain in the fund for expenditure in succeeding fiscal years. Notwithstanding section 12C.7, subsection 2, interest earned on moneys in the local government shared-services grant fund shall be credited to the fund.
   3.  The economic development authority shall adopt rules to establish and administer the grant program to provide for the allocation of moneys in the fund in the form of competitive grants to local governments in accordance with the purposes and objectives of this section. The rules adopted by the economic development authority shall specify the eligibility of applicants, eligible services and items for grant funding, the electronic application process, and the maximum award per grant. 
DIVISION IX
FIRSTHOME IOWA ACCOUNTS

    Sec. 96.  NEW SECTION.  12L.1  FirstHome Iowa program —— purpose and definitions.
   1.  The general assembly finds that the general welfare and well-being of the state are directly related to homeownership of the citizens of the state, and that a vital and valid public purpose is served by the creation and implementation of programs which encourage and make possible the attainment of homeownership by the greatest number of citizens of the state. The general welfare of the citizens of the state will be enhanced by establishing a FirstHome Iowa program which allows citizens of the state to invest money in a public trust for future application to the payment of qualified homebuyer expenses. The creation of the means of encouragement for citizens to invest in such a program represents the carrying out of a vital and valid public purpose. In order to make available to the citizens of the state an opportunity to fund future first-time homeownership, it is necessary that a public trust be established in which moneys may be invested for future use.
   2.  As used in this chapter, unless the context otherwise requires:
   a.  “Administrative fund” means the administrative fund established under section 12L.4.
   b.  “Beneficiary” means the individual designated by a participation agreement to benefit from advance payments of qualified homebuyer expenses on behalf of the beneficiary.
   c.  “First-time homebuyer” means an individual who is a resident of Iowa and who does not own, either individually or jointly, a single-family or multifamily residence, and who has not owned or purchased, either individually or jointly, a single-family or multifamily residence for a period of three years prior to the date of the qualified purchase for which the eligible home costs are paid or reimbursed from an account.
   d.  “Individual” means a natural person.
   e.  “FirstHome Iowa program trust” or “trust” means the trust created under section 12L.2. 
   f.  “FirstHome Iowa program trust account” or “account” means an account within the trust that was established for the purpose of paying or reimbursing a beneficiary’s eligible qualified homebuyer expenses in connection with a qualified purchase.
   g.  “Participant” means an individual, individual’s legal representative, trust, or estate that has entered into a participation agreement under this chapter, either individually or jointly with the individual’s spouse, for the advance payment of qualified homebuyer expenses on behalf of a beneficiary.
   h.  “Participation agreement” means an agreement between a participant and the trust entered into under this chapter.
   i.  “Program fund” means the program fund established under section 12L.4.
   j.  “Qualified homebuyer expenses” means any of the following:
   (1)  A down payment or closing costs for the qualified purchase of a single-family residence in Iowa that is the principal residence of the beneficiary if such beneficiary is a first-time homebuyer with respect to such purchase.
   (2)  A cost, fee, tax, or payment incurred by, or charged or assigned to, a beneficiary as part of the purchase under subparagraph (1) and listed on the statement of receipts and disbursements for the sale, including any statement prescribed by 12 C.F.R. §1026.38, as amended.
   (3)  Any United States veterans administration funding fee incurred by, or charged or assigned to, a beneficiary in connection with a veterans administration home loan guaranty program.
   k.  “Qualified purchase” means the purchase of a single-family residence in Iowa by the account’s beneficiary ninety or more days after the date the participant first opened the account.
   l.  “Resident” means the same as defined in section 422.4.
   m.  “Single-family residence” means a single-family residence owned and occupied by a beneficiary as the beneficiary’s principal residence, including but not limited to a manufactured home, mobile home, condominium unit, or cooperative.
    Sec. 97.  NEW SECTION.  12L.2  Creation of FirstHome Iowa program trust.
   A FirstHome Iowa program trust is created. The treasurer of state is the trustee of the trust, and has all powers necessary to carry out and effectuate the purposes, objectives, and provisions of this chapter pertaining to the trust, including the power to do all of the following:
   1.  Make and enter into contracts necessary for the administration of the trust created under this chapter.
   2.  Enter into agreements with any financial institution, the state, or any federal or other state agency, or other entity as required to implement this chapter.
   3.  Carry out the duties and obligations of the trust pursuant to this chapter.
   4.  Accept any grants, gifts, legislative appropriations, and other moneys from the state, any unit of federal, state, or local government, or any other person, firm, partnership, or corporation which the treasurer of state shall deposit into the administrative fund or the program fund.
   5.  Carry out studies and projections so the treasurer of state may advise participants regarding present and estimated future qualified homebuyer expenses and levels of financial participation in the trust required in order to enable participants to achieve their qualifying purchase objectives.
   6.  Participate in any federal, state, or local governmental program for the benefit of the trust.
   7.  Procure insurance against any loss in connection with the property, assets, or activities of the trust.
   8.  Enter into participation agreements with participants.
   9.  Make payments to or on behalf of beneficiaries for qualified homebuyer expenses pursuant to participation agreements.
   10.  Make refunds to participants upon the termination of participation agreements, and partial nonqualified distributions to participants, pursuant to the provisions, limitations, and restrictions set forth in this chapter.
   11.  Invest moneys from the program fund in any investments which are determined by the treasurer of state to be appropriate.
   12.  Engage investment advisors, if necessary, to assist in the investment of trust assets.
   13.  Contract for goods and services and engage personnel as necessary, including consultants, actuaries, managers, legal counsel, and auditors for the purpose of rendering professional, managerial, and technical assistance and advice to the treasurer of state regarding trust administration and operation.
   14.  Establish, impose, and collect administrative fees and charges in connection with transactions of the trust for deposit in the administrative fund and provide for reasonable service charges.
   15.  Administer the funds of the trust.
   16.  Adopt rules pursuant to chapter 17A for the administration of the trust.
    Sec. 98.  NEW SECTION.  12L.3  Participation agreements for trust.
   The trust may enter into participation agreements with participants on behalf of beneficiaries pursuant to the following terms and agreements:
   1.  Each participation agreement may require a participant to agree to invest a specific amount of money in the trust for a specific period of time for the benefit of a specific beneficiary. A participant shall not be required to make an annual contribution on behalf of a beneficiary. The maximum contribution that may be deducted for Iowa income tax purposes shall be the amount contributed by the participant during the applicable tax year, not to exceed five thousand five hundred dollars per beneficiary per year adjusted annually to reflect increases in the consumer price index.
   2.  The execution of a participation agreement by the trust shall not guarantee in any way that qualified homebuyer expenses will be equal to projections and estimates provided by the trust or that the beneficiary named in any participation agreement will qualify for a mortgage, home loan, or other forms of credit for a qualified purchase.
   3.  a.  A beneficiary under a participation agreement may be changed as permitted under rules adopted by the treasurer of state upon written request of the participant as long as the substitute beneficiary is eligible for participation.
   b.  Participation agreements may otherwise be freely amended throughout their terms in order to enable participants to increase or decrease the level of participation, change the designation of beneficiaries, and carry out similar matters as authorized by rule.
   4.  Each participation agreement shall provide that the participation agreement may be canceled upon the terms and conditions, and upon payment of applicable fees and costs set forth and contained in the rules adopted by the treasurer of state.
   5.  A participant may designate a successor in accordance with rules adopted by the treasurer of state. The designated successor shall succeed to the ownership of the account in the event of the death of the participant. In the event a participant dies and has not designated a successor to the account, the following criteria shall apply:
   a.  The beneficiary of the account, if eighteen years of age or older, shall become the owner of the account as well as remain the beneficiary upon filing the appropriate forms in accordance with rules adopted by the treasurer of state.
   b.  If the beneficiary of the account is under the age of eighteen, account ownership shall be transferred to the first surviving parent or other legal guardian of the beneficiary to file the appropriate forms in accordance with rules adopted by the treasurer of state.
    Sec. 99.  NEW SECTION.  12L.4  FirstHome Iowa program and administrative funds —— investment and payments.
   1.  a.  The treasurer of state shall segregate moneys received by the trust into two funds: the FirstHome Iowa program fund and the administrative fund to be used for administration of the program.
   b.  All moneys paid by participants in connection with participation agreements shall be deposited as received into separate accounts within the program fund.
   c.  Contributions to the trust made by participants may only be made in the form of cash.
   d.  A participant or beneficiary may, directly or indirectly, direct the investment of any contributions to the trust or any earnings thereon no more than four times in a calendar year.
   2.  Moneys accrued by participants in the program fund of the trust may be used for payments to or on behalf of a beneficiary for qualified homebuyer expenses.
    Sec. 100.  NEW SECTION.  12L.5  Cancellation of agreements.
   A participant may cancel a participation agreement at will. Upon cancellation of a participation agreement, a participant shall be entitled to the return of the participant’s account balance.
    Sec. 101.  NEW SECTION.  12L.6  Ownership of payments and investment income —— transfer of ownership rights.
   1.  a.  A participant retains ownership of all payments made under a participation agreement up to the date of utilization for payment of qualified homebuyer expenses for the beneficiary.
   b.  All income derived from the investment of the payments made by the participant shall be considered to be held in trust for the benefit of the beneficiary.
   2.  In the event the FirstHome Iowa program is terminated prior to payment of qualified homebuyer expenses for the beneficiary, the participant is entitled to a refund of the participant’s account balance.
   3.  Any amounts which may be paid to any person or persons pursuant to the FirstHome Iowa program trust but which are not listed in this section are owned by the trust.
   4.  A participant may transfer ownership rights to another participant or may transfer funds to another account under the trust. The transfer shall be made and the property distributed in accordance with rules adopted by the treasurer of state or with the terms of the participation agreement.
   5.  A participant shall not be entitled to utilize any interest in the trust as security for a loan.
    Sec. 102.  NEW SECTION.  12L.7  Annual audited financial report to governor and general assembly.
   1.  a.  The treasurer of state shall submit an annual audited financial report, prepared in accordance with generally accepted accounting principles, on the operations of the trust by November 1 to the governor and the general assembly.
   b.  The annual audit shall be made either by the auditor of state or by an independent certified public accountant designated by the auditor of state and shall include direct and indirect costs attributable to the use of outside consultants, independent contractors, and any other persons who are not state employees.
   2.  The annual audit shall be supplemented by all of the following information prepared by the treasurer of state:
   a.  Any related studies or evaluations prepared in the preceding year.
   b.  A summary of the benefits provided by the trust including the number of participants and beneficiaries in the trust.
   c.  Any other information which is relevant in order to make a full, fair, and effective disclosure of the operations of the trust.
    Sec. 103.  NEW SECTION.  12L.8  Tax considerations.
   State income tax treatment of the FirstHome Iowa program trust shall be as provided in section 422.7, subsections 46 and 47.
    Sec. 104.  NEW SECTION.  12L.9  Property rights to assets in trust.
   1.  The assets of the trust shall at all times be preserved, invested, and expended solely and only for the purposes of the trust and shall be held in trust for the participants and beneficiaries.
   2.  No property rights in the trust shall exist in favor of the state.
   3.  The assets of the trust shall not be transferred or used by the state for any purposes other than the purposes of the trust.
    Sec. 105.  NEW SECTION.  12L.10  Construction.
   This chapter shall be construed liberally in order to effectuate its purpose.
    Sec. 106.  Section 12G.2, Code 2026, is amended by adding the following new subsection:
   NEW SUBSECTION.  6.  Create strategies for coordination of the program with the FirstHome Iowa program trust established in chapter 12L.
    Sec. 107.  Section 232D.503, subsection 6, Code 2026, is amended by adding the following new paragraph:
   NEW PARAGRAPH.  g.  A FirstHome Iowa program trust account established for the minor pursuant to chapter 12L.
    Sec. 108.  Section 422.7, Code 2026, is amended by adding the following new subsections:
   NEW SUBSECTION.  46.  a.  Subtract the contribution that may be deducted for Iowa income tax purposes as a participant in the FirstHome Iowa program trust pursuant to section 12L.3, subsection 1. For purposes of this paragraph, a participant who makes a contribution on or before the date prescribed in section 422.21 for making and filing an individual income tax return, excluding extensions, or the date for making and filing an individual income tax return determined by the director pursuant to an order issued under section 421.17, subsection 30, may elect to be deemed to have made the contribution on the last day of the preceding calendar year. The director, after consultation with the treasurer of state, shall prescribe by rule the manner and method by which a participant may make an election authorized by the preceding sentence.
   b.  Add the amount resulting from the cancellation of a participation agreement refunded to the taxpayer as a participant in the FirstHome Iowa program trust to the extent previously deducted as a contribution to the trust.
   c.  Add, to the extent previously deducted as a contribution to the trust, the amount resulting from a withdrawal or transfer made by the taxpayer from the FirstHome Iowa program trust for purposes other than the payment of qualified homebuyer expenses.
   NEW SUBSECTION.  47.  Subtract, to the extent included, income from interest and earnings received from the FirstHome Iowa program trust created in chapter 12L.
    Sec. 109.  Section 541B.4, Code 2026, is amended by adding the following new subsections:
   NEW SUBSECTION.  5.  Withdrawal for deposit into FirstHome Iowa program trust account.  First-time homebuyer account balances under this chapter may be withdrawn without penalty or taxation in this state if such withdrawal is deposited in an account within the FirstHome Iowa program trust under chapter 12L within thirty days of the withdrawal. The treasurer of state may by rule provide for the direct transfer of moneys within an account under this chapter to a FirstHome Iowa program trust account and such transfer shall not be subject to penalty or taxation in this state.
   NEW SUBSECTION.  6.  No new accounts.  New accounts shall not be established under this chapter on or after July 1, 2026.
    Sec. 110.  Section 627.6, Code 2026, is amended by adding the following new subsection:
   NEW SUBSECTION.  18.  The debtor’s interest, whether as participant or beneficiary, in contributions and assets, including the accumulated earnings and market increases in value, held in an account in the FirstHome Iowa program trust organized under chapter 12L.
    Sec. 111.  Section 633.108, subsection 2, Code 2026, is amended by adding the following new paragraph:
   NEW PARAGRAPH.  e.  A FirstHome Iowa program trust account established for the minor pursuant to chapter 12L.
    Sec. 112.  Section 633.555, subsection 1, Code 2026, is amended by adding the following new paragraph:
   NEW PARAGRAPH.  f.  An account owner or participant under a FirstHome Iowa program trust account established for the protected person pursuant to chapter 12L.
    Sec. 113.  Section 633.678, subsection 1, Code 2026, is amended by adding the following new paragraph:
   NEW PARAGRAPH.  f.  An account owner or participant under a FirstHome Iowa program trust account established for the protected person pursuant to chapter 12L.
    Sec. 114.  Section 633.681, subsection 1, Code 2026, is amended by adding the following new paragraph:
   NEW PARAGRAPH.  e.  An account owner or participant under a FirstHome Iowa program trust account established for the protected person pursuant to chapter 12L.
    Sec. 115.  APPLICABILITY.  The following applies to contributions made under chapter 12L on or after July 1, 2026, for tax years ending on or after that date: 
   The section of this division of this Act enacting section 422.7, subsections 46 and 47.
DIVISION X
PROPERTY ASSESSMENT SYSTEM TASK FORCE

    Sec. 116.  PROPERTY TAX ASSESSMENT PROCESS STUDY —— REPORT.
   1.  By January 1, 2027, the department of revenue shall prepare and submit a report, including any recommended changes, to the general assembly regarding the assessment of property in this state for taxation purposes, including but not limited to review of all of the following:
   a.  Assessor qualifications and education.
   b.  Assessor selection and retention.
   c.  Functions of conference boards and examining boards.
   d.  Property assessment procedures, frequency, and timelines.
   e.  Property tax assessment protest and appeal procedures and burdens of proof.
   2.  The department may convene a task force of local and state officials and technical experts to assist in the review undertaken pursuant to subsection 1.
DIVISION XI
COUNTY OFFICERS —— APPOINTMENT IN LIEU OF ELECTION

    Sec. 117.  Section 39.17, Code 2026, is amended to read as follows:
   39.17  County officers.
   1.  There shall be elected in each county at the general election to be held in the year 1976 and every four years thereafter, an auditor and a sheriff, each to hold office for a term of four years.
   2.  There shall be elected in each county at the general election to be held in 1974 and each four years thereafter, a treasurer, a recorder, and a county attorney who shall each hold office for a term of four years.
    Sec. 118.  Section 43.24, subsection 3, paragraph b, Code 2026, is amended to read as follows:
   b.  Objections filed with the commissioner shall be considered by three elected county officers whose eligibility is not in question. The chairperson of the board of supervisors shall appoint the three elected officers unless the chairperson is ineligible, in which case, the appointments shall be made by the county auditor. In either case, a majority vote shall decide the issue.
    Sec. 119.  Section 44.7, Code 2026, is amended to read as follows:
   44.7  Hearing before commissioner.
   Except as otherwise provided in section 44.8, objections filed with the commissioner shall be considered by the county auditor, county treasurer, and county attorney, and a majority decision shall be final. However, if the objection is to the certificate of nomination of one or more of the above named county officers the county attorney, the officer or officers objected to county attorney shall not pass upon the objection, but their places the county attorney’s place shall be filled, respectively, by the chairperson of the board of supervisors, the sheriff, and the county recorder. Objections relating to incorrect or incomplete information for information that is required under section 44.3 shall be sustained.
    Sec. 120.  Section 331.321, subsection 1, Code 2026, is amended by adding the following new paragraphs:
   NEW PARAGRAPH.  0x.  A county auditor in accordance with section 331.501.
   NEW PARAGRAPH.  00x.  A county treasurer in accordance with section 331.551.
   NEW PARAGRAPH.  000x.  A county recorder in accordance with section 331.601.
    Sec. 121.  Section 331.324, subsection 6, Code 2026, is amended to read as follows:
   6.  In carrying out the requirement of section 331.322, subsection 1, the board may purchase an individual or a blanket surety bond insuring the fidelity of county officers and county employees who are accountable for county funds or property subject to the minimum surety bond requirements of chapter 64. An elected A county officer is deemed to have furnished surety if the officer is covered by a blanket bond purchased as provided in this subsection.
    Sec. 122.  Section 331.501, Code 2026, is amended to read as follows:
   331.501  Office of county auditor.
   1.  The office of auditor is an elective appointed office except that if a vacancy occurs in the office, a successor shall be elected or appointed to the unexpired term as provided in chapter 69.  The auditor shall be appointed by the board as provided in section 331.321.
   2.  A person elected or appointed to the office of auditor shall qualify by taking the oath of office as provided in section 63.10 and giving bond as provided in section 64.8.
   3.  The term of office of the auditor is four years unless removed pursuant to section 331.321.  The term of office shall commence on the first day in January which is not a Sunday or holiday and continue for four years or until a successor is appointed and qualifies as provided in this section. A vacancy shall be filled by the board for the unexpired term.
    Sec. 123.  Section 331.551, Code 2026, is amended to read as follows:
   331.551  Office of county treasurer.
   1.  The office of treasurer is an elective appointed office except that if a vacancy occurs in the office, a successor shall be elected or appointed to the unexpired term as provided in chapter 69.  The treasurer shall be appointed by the board as provided in section 331.321.
   2.  A person elected or appointed to the office of treasurer shall qualify by taking the oath of office as provided in section 63.10 and give bond as provided in section 64.10.
   3.  The term of office of the treasurer is four years unless removed pursuant to section 331.321.  The term of office shall commence on the first day in January which is not a Sunday or holiday and continue for four years or until a successor is appointed and qualifies as provided in this section. A vacancy shall be filled by the board for the unexpired term.
    Sec. 124.  Section 331.601, Code 2026, is amended to read as follows:
   331.601  Office of county recorder.
   1.  The office of recorder is an elective appointed office except that if a vacancy occurs in the office, a successor shall be elected or appointed to the unexpired term as provided in chapter 69.  The recorder shall be appointed by the board as provided in section 331.321.
   2.  A person elected or appointed to the office of recorder shall qualify by taking the oath of office as provided in section 63.10 and giving bond as provided in section 64.8.
   3.  The term of office of the recorder is four years unless removed pursuant to section 331.321.  The term of office shall commence on the first day in January which is not a Sunday or holiday and continue for four years or until a successor is appointed and qualifies as provided in this section. A vacancy shall be filled by the board for the unexpired term.
   4.  In counties in which the office of county recorder has been abolished, the board of supervisors shall reassign the duties of the county recorder who also serves as the county registrar pursuant to chapter 144.
    Sec. 125.  Section 331.902, subsections 2, 3, and 5, Code 2026, are amended to read as follows:
   2.  Each elective officer specified in subsection 1 shall maintain a record in the county system of each fee and charge collected. The record shall show the date, amount, payor, and type of service, and, when the fee is for recording an instrument, the names of the parties to the instrument. The record of the fees collected shall be retained for three years after audit of the county pursuant to section 11.6.
   3.  Each elective officer specified in subsection 1 shall make a quarterly report to the board showing, by type, the fees collected during the preceding quarter. The officer shall pay at least quarterly to the county treasury the fees and charges collected, except for the county auditor’s transfer fees, which shall be paid directly to the county treasurer by the county recorder. The officer shall receive a receipt and maintain a record of the date and amount of each payment into the county treasury. This subsection does not apply to the county treasurer if the county treasurer credits the fees daily to the county treasury and reports the receipts on the monthly report to the auditor and the board of supervisors.
   5.  Each elective officer specified in subsection 1 shall retain overpayments of fees and other charges paid to the county in an amount of five dollars or less, unless the payor has requested a refund of the overpayment.
    Sec. 126.  Section 331.907, Code 2026, is amended to read as follows:
   331.907  Compensation schedule —— preparation and adoption.
   1.  The annual compensation of the auditor, treasurer, recorder, sheriff, county attorney, and supervisors shall be determined as provided in this section. The county compensation board annually shall review the compensation paid to comparable officers in other counties of this state, other states, private enterprise, and the federal government. In setting the salary of the county sheriff, the county compensation board shall set the sheriff’s salary so that it is comparable to salaries paid to professional law enforcement administrators and command officers of the state patrol, the division of criminal investigation of the department of public safety, and city police chiefs employed by cities of similar population to the population of the county. The county compensation board shall prepare a compensation schedule for the elected specified county officers for the succeeding fiscal year. The county compensation board shall provide documentation to the board of supervisors that demonstrates how the county compensation board determined the recommended compensation schedule, including by providing the applicable compensation information for comparable officers in other counties of this state, other states, private enterprise, and the federal government. A recommended compensation schedule requires a majority vote of the membership of the county compensation board.
   2.  At the public hearing held on the county budget as provided in section 331.434, the county compensation board shall submit its recommended compensation schedule for the next fiscal year to the board of supervisors for inclusion in the county budget. The board of supervisors shall review the recommended compensation schedule for the elected specified county officers and determine the final compensation schedule. In determining the final compensation schedule for the elected specified county officers, the board of supervisors may set compensation at less than the compensation provided in the current compensation schedule if the position is reduced to part-time under the recommended compensation schedule. A copy of the final compensation schedule shall be filed with the county budget at the office of the director of the department of management. The final compensation schedule takes effect on July 1 following its adoption by the board of supervisors. For purposes of this subsection, “current compensation schedule” means the compensation schedule in effect when the board of supervisors considers the recommended compensation schedule.
   3.  The board of supervisors may adopt a decrease in compensation paid to supervisors irrespective of the county compensation board’s recommended compensation schedule or other approved changes in compensation paid to other elected county officers. A decrease in compensation paid to supervisors shall be adopted by the board of supervisors no less than thirty days before the county budget is certified under section 24.17.
   4.  The elected specified county officers are also entitled to receive their actual and necessary expenses incurred in performance of official duties of their respective offices. The board of supervisors may authorize the reimbursement of expenses related to an educational course, seminar, or school which is attended by a county officer after the county officer is elected or appointed, but prior to the county officer taking office.
   5.  In counties having two courthouses, a principal elected county officer and the principal officer’s first deputy or assistant may agree in writing to a division of their annual salaries. The division shall not allow for payment to the elected officer and the first deputy or assistant which is greater than the sum of the two salaries otherwise authorized by law. Upon certification to the board by the elected officer involved, the board shall certify to the auditor the annual salaries certified by the elected officer.
    Sec. 127.  CURRENT COUNTY OFFICE HOLDERS.  

The term of office of each county auditor, county treasurer, and county recorder holding such office on the effective date of this division of this Act shall continue until expiration of the current elective term. After expiration of such term or vacancy in such office occurring prior to expiration, such office shall be filled by appointment by the county board of supervisors as provided in this division of this Act.
    Sec. 128.  IMPLEMENTATION —— ADDITIONAL LEGISLATION.  

Following the effective date of this division of this Act, the secretary of state shall review other provisions of law to determine if additional legislative changes are necessary to implement the changes in this division of this Act and, if necessary, shall submit legislation to the local government committees of the senate and house of representatives not later than January 1, 2027.
EXPLANATION
The inclusion of this explanation does not constitute agreement with

the explanation’s substance by the members of the general assembly.
   This bill relates to state and local government taxes, budgets, and authority, by modifying provisions relating to the assessment and taxation of property, funding from the secure an advanced vision for education fund, the election of certain county officers, urban renewal areas and urban revitalization areas, and establishing a program for certain first-time homebuyers.
   DIVISION I —— PROPERTY TAX REVENUE LIMITATIONS —— BOND REVENUE USE LIMITATIONS. Under the bill, new Code section 24.35 provides that for governmental entity budgets certified for budget years beginning on or after July 1, 2027, proposed unassigned reserve funds identified within a governmental entity’s general fund shall not exceed an amount equal to 10 percent of the budgeted expenditures from the governmental entity’s general fund for the prior fiscal year before any budgeted transfers from such general fund. If the governmental entity’s budget does not comply with the requirement, the department of management shall not certify the governmental entity’s taxes back to the county auditor under Code section 24.17 and the governmental entity shall remedy the violation and recertify the budget. For purposes of this provision, the bill defines “governmental entity” to mean any unit of government or other public body or public corporation, including any intergovernmental entity, that has the power to impose or certify a property tax levy, but excludes school districts. The bill strikes a provision in Code section 176A.8 relating to unexpended funds of county agricultural extensions.
   As part of conducting an audit of a governmental subdivision under Code chapter 11 for fiscal years beginning on or after July 1, 2027, an examination of the governmental subdivision’s compliance with new Code section 24.35 shall be performed, including verification of the circumstances resulting in actual reserve funds exceeding the specified limits.
   The bill enacts new Code section 444.25, which establishes a maximum aggregate amount of property tax dollars that may be certified for levy among all property tax levies imposed by a governmental entity other than a school district, excluding debt service levies. For the budget year beginning July 1, 2027, and each budget year thereafter, the maximum aggregate amount of property tax dollars that may be certified for levy among all property tax levies imposed by a governmental entity shall not exceed an amount equal to the sum of 102 percent of the aggregate amount of property tax dollars certified for levy by the governmental entity among all property tax levies imposed by the governmental entity for the preceding fiscal year plus the sum of the new valuation growth amount, as calculated under the bill, for each of the governmental entity’s property tax levies for the budget year. If the budget year includes a voter-approved property tax levy that was not approved for imposition in the preceding fiscal year, the maximum aggregate amount of property tax dollars for the governmental entity for the budget year is increased by the amount of the voter-approved property tax levy approved at election for the budget year. If a governmental entity certifies a budget that violates new Code section 444.25, the department of management shall reduce each of the applicable governmental entity’s property tax levies on a pro rata basis so that the governmental entity is in compliance. New Code section 444.25 does not remove or otherwise affect property tax limitations, including levy rate and use limitations, otherwise provided by law for any property tax levy of the governmental entity. The authority of the state appeal board under Code section 24.48 to suspend property tax levy limitations does not apply to the limitations of new Code section 444.25, except under conditions of natural disasters or other emergencies or if there are unusual problems relating to major new functions required by state law.
   The bill also enacts new Code section 444.26, which provides that, on or after July 1, 2026, a governmental entity, as defined in the bill, shall not issue bonds or other indebtedness payable from an ad valorem property tax levy for the purpose of funding the general operations of the governmental entity or otherwise use proceeds from the sale of bonds or issuance of other indebtedness to fund general operations. The bill defines “general operations” to mean services or activities generally funded from the governmental entity’s general fund, which are necessary for the operation of the governmental entity, including salaries and benefits, or which are for the health and welfare of the governmental entity’s citizens or primarily intended to benefit all residents of the governmental entity, but excluding services financed by statutory funds other than a debt service fund. The department of management, following consultation with the city finance committee and the county finance committee, may adopt rules under Code chapter 17A to implement the new Code section governing funding of general operations.
   DIVISION II —— COMMERCIAL AND INDUSTRIAL PROPERTY ASSESSMENT LIMITATIONS. Current Code section 441.21 imposes an assessment limitation (rollback) on commercial property, industrial property, and property valued by the department of revenue under Code chapter 434 (railway company property). For valuations established for the assessment year beginning January 1, 2022, and each assessment year thereafter, the portion of actual value at which each property unit of commercial property shall be assessed shall be the sum of the following: (1) an amount equal to the product of the assessment limitation percentage applicable to residential property multiplied by the actual value of the property that exceeds $0 but does not exceed $150,000; and (2) an amount equal to 90 percent of the actual value of the property for that assessment year that exceeds $150,000. The limitation, by operation of law, applies to the assessed value of railway company property. The bill increases the amount of value subject to the residential assessment limitation rates from $150,000 to $250,000 for each property unit. The sections of the division of the bill amending Code section 441.21(5)(b)(2) and 441.21(5)(c)(2) apply retroactively to assessment years beginning on or after January 1, 2026. For fiscal years beginning on or after July 1, 2027, the bill eliminates the $125 million annual appropriation used under Code section 441.21(5)(e) for payments to replace property taxes due to the application of the residential property assessment limitation to certain portions of commercial and industrial property valuations.
   DIVISION III —— PROPERTY TAX EXEMPTIONS AND CREDITS. Current Code chapter 425, subchapter I, provides a homestead credit against the tax on each eligible homestead in the state in an amount equal to the actual levy on the first $4,850 of actual value for each homestead, funded by an annual appropriation from the general fund of the state. The bill changes the homestead credit to an exemption in the amount of $4,850 of taxable value and eliminates the state general fund appropriation. The bill also changes the homestead credit for certain disabled veterans, which is for the full amount of taxes due, to an exemption of the full taxable value of the homestead. Under the bill, homestead credit claims approved under Code chapter 425, subchapter I, Code 2026, prior to and valid on the effective date of this division of the bill shall result in a homestead exemption under the bill without further filing by the claimant if the claimant meets the criteria for the exemption and the assessor has appropriate information to verify such eligibility. The bill makes corresponding changes to various other provisions of law to reflect the change from a homestead credit to a homestead exemption.
   The bill repeals Code section 425.1A, which provides a property tax exemption of $6,500 of taxable value on the homestead of owners that have attained the age of 65.
   The bill amends, strikes, and repeals various provisions of Code chapter 425, subchapter II, that govern the additional homestead credit for property taxes due and the reimbursement of rent constituting property taxes paid for certain eligible claimants based on age, disability, and income. The bill eliminates the reimbursement of rent constituting property taxes paid and amends the additional tax credit for property taxes due by eliminating eligibility based on income or disability status, except for certain disabled claimants under the previous program, and modifies the remaining claimant eligibility as a “property tax growth credit”. The property tax growth credit is allowed in addition to the homestead tax exemption created in the bill and available to claimants who own their homestead that has a qualifying actual value. The bill also limits the amount of land that is included as part of the homestead for purposes of the credit to not more than one-half acre. Eligible claimants must be either: (1) A person who has attained the age of 65 years; or (2) a person who is totally disabled, but only if the person received a credit for property taxes due for the homestead under the schedule specified in Code section 425.23(1)(a), Code 2026, for property taxes due and payable in the fiscal year beginning July 1, 2026, and if the person has filed for the credit established under the bill for each of the subsequent years, if any. Under the bill, “qualifying actual value” means one of the following: (1) an actual value of $350,000 or less for the applicable assessment year; or (2) an actual value that exceeds $350,000 for the applicable assessment year and the actual value of the homestead was equal to or less than $350,000 for the first year for which the owner claimed the credit, and the increase in the homestead’s actual value since the first-year claim was not the result of improvements, structural replacements, or modifications to the homestead beyond necessary repairs, and the owner has claimed the credit for each subsequent year since the first-year claim.
   A claimant must annually claim the credit and is limited to one credit per household. The amount of the credit shall be the difference between the actual amount of property taxes due on the homestead during the fiscal year next following the base year minus the lesser of the following: (1) the actual amount of property taxes due on the homestead during the first fiscal year for which the claimant filed a claim for a credit calculated under the bill and for which the property taxes due on the homestead were calculated on an assessed valuation that was not a partial assessment and if the claimant has filed for the credit calculated under the bill for each of the subsequent fiscal years after the first credit claimed; (2) the actual amount of property taxes due on the homestead during a fiscal year following the first fiscal year for which the claimant filed a claim for a credit calculated under the bill and for which the property taxes due on the homestead were calculated on an assessed valuation that was not a partial assessment and if the claimant has filed for the credit calculated under the bill for each of the subsequent fiscal years after the first credit claimed; and (3) the actual amount of property taxes due on the homestead during the first fiscal year for which the claimant filed a claim for a credit calculated under Code section 425.23(1)(c)(2), Code 2026, and for which the property taxes due on the homestead were calculated on an assessed valuation that was not a partial assessment and if the claimant has filed for the credit calculated under Code section 425.23(1)(c)(2), Code 2026, or the bill for each of the subsequent fiscal years after the first credit claimed. The bill makes corresponding changes to various other provisions of law to reflect the changes to Code chapter 425, subchapter II. The bill strikes Code section 435.22(4), which establishes and appropriates money to fund claims for credit for manufactured or mobile home tax due.
   The bill requires the department of health and human services to establish and administer a program for the reimbursement of rent constituting property taxes paid, as defined in Code section 425.17(9), Code 2026, for rents paid by eligible claimants in calendar years beginning on or after January 1, 2027. The department shall administer the program under the provisions of Code chapter 425, subchapter II, Code 2026, including determinations of eligibility and calculations of reimbursement amounts, as if the program under that subchapter and any rules adopted to implement or administer the program were in effect. The bill appropriates for fiscal years beginning on or after July 1, 2026, from the general fund of the state to the department of health and human services, an amount necessary to establish and administer the rent reimbursement program.
   The bill directs the department of revenue to review other provisions of law to determine if additional changes are necessary to implement this division of the bill and, if necessary, submit legislation to the ways and means committees of the senate and house of representatives not later than January 1, 2027.
   This division of the bill does not affect the operation of, or prohibit the application of, prior provisions of the Code sections amended by the division, or rules to administer such prior provisions, for assessment years beginning before January 1, 2026, for property taxes due and payable in fiscal years beginning before July 1, 2027, or for reimbursement of rent constituting property taxes paid for amounts paid by the claimant in calendar years beginning before January 1, 2027, including appropriations made therefor.
   This division of the bill applies retroactively to assessment years beginning on or after January 1, 2026, for property taxes due and payable in fiscal years beginning July 1, 2027.
   DIVISION IV —— SECURE AN ADVANCED VISION FOR EDUCATION FUND —— EQUITY TRANSFER PERCENTAGE. Prior to allocation of moneys available in the secure an advanced vision for education fund to school districts on a per-pupil basis, certain amounts are calculated and allocated to other funds. Code section 423F.2 establishes a calculation for an equity transfer percentage that is used, in part, to determine amounts distributed and credited to the foundation base supplement fund and the property tax equity and relief fund. For fiscal years beginning on or after July 1, 2026, the bill eliminates the calculation of the equity transfer percentage based on increases in the amount in the secure an advanced vision for education fund and instead specifies that the equity transfer percentage for the fiscal year beginning July 1, 2026, is 15 percent; for the fiscal year beginning July 1, 2027, is 20 percent; for the fiscal year beginning July 1, 2028, is 25 percent; and for the fiscal year beginning July 1, 2029, and each fiscal year thereafter, is 30 percent.
   The bill provides that for amounts allocated under Code section 423F.2 for fiscal years beginning on or after July 1, 2026, the department of management shall adjust or reconcile actual amounts to be received by school districts in the fiscal year immediately following the fiscal year during which the revenues were collected.
   DIVISION V —— PROPERTY PARCEL INFORMATION. The bill requires each county auditor to submit an annual report not later than January 1 to the department of management containing parcel-level property data, including parcel identification information, location, size, valuation, classification, types of structures and improvements, exemptions, credits, and whether the parcel is subject to a division of revenue. The bill authorizes the department of management to require the report to include additional parcel-level data deemed necessary by the director of the department of management. The bill requires the department of management to prescribe the form and manner of submitting such annual report.
   DIVISION VI —— URBAN RENEWAL AND URBAN REVITALIZATION. The bill strikes and replaces Code section 403.2, which specifies general policy of Iowa’s “Urban Renewal Law” by generally stating that the powers conferred by Code chapter 403 are for public uses and public purposes. The bill also amends Code section 403.3 describing the general scope of a municipality’s program under Iowa’s urban renewal law.
   The bill amends the definition of “urban renewal project” under current Code section 403.17(25) to apply to urban renewal projects approved before the effective date of this division of the bill. The bill also establishes a definition of “urban renewal project” for projects approved on or after the effective date of the division of the bill, which includes only the following undertakings and activities: (1) acquisition of a portion of a property slum area, blighted area, or economic development area to be used for the installation, construction, or reconstruction of utilities or streets that directly serve the area if the utilities or streets are necessary for furtherance of the urban renewal plan; (2) demolition and removal of buildings and improvements located on the portion of such property; and (3) sale of public property within the urban renewal area for uses in accordance with the urban renewal plan. The bill provides that moneys from any source deposited into the municipality’s urban renewal special fund shall not be expended for or otherwise used in connection with an urban renewal project approved on or after the effective date of the division of the bill that does not meet the new definition of “urban renewal project”.
   The bill enacts new Code section 403.18A, which provides that an ordinance providing for a division of revenue under Code section 403.19 adopted before the effective date of the division of the bill and that is not limited in duration under Code section 403.17(10) or Code section 403.22(5) shall be subject to the duration limitation established in the new Code section. Such a division of revenue ordinance described may continue in effect until such time that the urban renewal area is dissolved by the municipality, the ordinance is repealed by the municipality, or the ordinance terminates following the retirement or payment of all indebtedness payable from such division of revenue in existence on the effective date of the division of the bill, whichever occurs first. Under new Code section 403.18A, a municipality shall not incur additional indebtedness payable using revenue resulting from such an ordinance on or after the effective date of the division of the bill. The bill prohibits such an ordinance or the applicable urban renewal area from being amended to include territory that is not subject to the ordinance on the effective date of the division of the bill.
   The bill amends Code section 403.19(3) to provide that costs of an urban renewal project, including bonds, loans, advances, or other indebtedness incurred on or after the effective date of the division of the bill and payable from the municipality’s urban renewal special fund shall only be paid from the portion of incremental taxes resulting from that portion of the urban renewal area governed by the ordinance where the urban renewal project is located.
   Under the bill, an ordinance providing for a division of revenue under Code section 403.19 that is adopted on or after the effective date of the division of the bill shall be limited to 20 years from the calendar year following the calendar year in which the municipality first certifies to the county auditor the amount of any loans, advances, indebtedness, or bonds that qualify for payment from the division of revenue.
   As a result of the changes to a municipality’s urban renewal powers and the definition of urban renewal project, the bill eliminates the applicability of the low and moderate income housing requirements of Code section 403.22 for urban renewal areas established on or after the effective date of the division of the bill.
   Code section 404.3D provides that for revitalization areas established on or after July 1, 2024, and for first-year exemption applications for property located in a revitalization area in existence on July 1, 2024, filed on or after July 1, 2024, an exemption authorized under Code chapter 404 for property that is residential property shall not apply to property tax levies imposed by a school district. The bill amends that Code section to provide that in addition to the inapplicability of the exemption to school district property tax levies, for property taxes due and payable in fiscal years beginning on or after July 1, 2027, if such a property receiving an exemption is located in both a revitalization area and an urban renewal area, the school district property taxes on the property shall not be subject to the division of revenue under Code section 403.19 and when collected shall be paid to the school district.
   This division of the bill takes effect upon enactment.
   DIVISION VII —— ASSESSMENT FREQUENCY AND PROCEDURES. Under current law, all property in an assessing jurisdiction is generally reassessed to determine the property’s actual value every two years, unless the property is new or has been improved or changed. The bill provides that beginning with the assessment year 2025, property shall be reassessed every three years and that the department of revenue’s equalization process shall occur in the assessment year immediately preceding each reassessment year.
   The bill amends Code section 441.21(3) by providing that for assessment years beginning on or after January 1, 2027, if the taxpayer’s property has increased in actual value by 15 percent or more from the immediately preceding reassessment year or the most recent assessment year following such reassessment year if the property was revalued or reassessed in that assessment year, the assessor shall provide the taxpayer with a statement of the reasons for the increase in actual value, information specifying the portion of actual value increase attributable to a change in classification, revaluation, new construction, improvements, or renovations to the property, and all information in any formula or method used to determine the actual value.
   Under current Code section 441.21(3), the burden of proof is upon any complainant attacking a property valuation as excessive, inadequate, inequitable, or capricious. However, when the complainant offers competent evidence that the market value of the property is different than the market value determined by the assessor, the burden of proof thereafter is upon the officials or persons seeking to uphold such valuation to be assessed. The bill modifies the burden of proof in certain circumstances. For assessment years beginning on or after January 1, 2027, if the taxpayer’s property actual value increased by 15 percent or more from the immediately preceding reassessment year or the most recent assessment year following such reassessment year if the property was revalued or reassessed in that assessment year, including an increase as the result of an equalization order, and the property did not change classification or primary use and the increase in actual value is not the result of new construction, improvements, or renovations to the property, the actual value so determined by the assessor is not presumed to be the actual value and in any protest or appeal the assessor shall have the burden of proof that the valuation is not excessive, inadequate, inequitable, or capricious.
   The bill amends Code section 441.33 to provide that ex parte communications with board of review members are prohibited in protests before the board.
   The bill directs the department of revenue to review other provisions of law to determine if additional changes are necessary to implement the change in timing of periodic assessments enacted in this division of the bill and, if necessary, submit legislation to the ways and means committees of the senate and house of representatives not later than January 1, 2027.
   DIVISION VIII —— LOCAL GOVERNMENT SHARED-SERVICES GRANT PROGRAM. The bill establishes a local government shared-services grant fund program and fund. For purposes of the program, “local government” means a county, city, township, or any special-purpose district or authority. The bill appropriates moneys in the fund to the economic development authority to provide grants to local governments to assist in efforts to consolidate government positions and pursue agreements with other local governments to share services and reduce the use of property tax revenues for such shared services. Grant funds may be used by the local government for costs to implement service-sharing or service-consolidation initiatives and transitional or temporary costs of eliminating services. The bill requires the economic development authority to adopt rules to establish and administer the grant program to provide for the allocation of moneys in the fund in the form of competitive grants to local governments.
   DIVISION IX —— FIRSTHOME IOWA ACCOUNTS. The bill establishes a FirstHome Iowa program, which allows citizens of the state to invest money in a public trust for future application to the payment of qualified homebuyer expenses. A FirstHome Iowa program trust is created and the treasurer of state is the trustee of the trust. The bill grants to the treasurer of state all powers necessary to carry out and effectuate the purposes and objectives of the trust, including the power to make and enter into contracts, accept any moneys for purposes of the program, carry out studies and projections to advise participants regarding present and estimated future qualified homebuyer expenses, procure insurance against any loss in connection with the trust, enter into participation agreements with participants, make payments to or on behalf of beneficiaries for qualified homebuyer expenses, and invest moneys from the program fund in any investments which are determined by the treasurer of state to be appropriate.
   The trust may enter into participation agreements with participants on behalf of beneficiaries. The participant contributes moneys into an account for a beneficiary, who is an individual to benefit from advance payments of qualified homebuyer expenses on behalf of the beneficiary. Moneys accrued by participants in an account may be used for payments to or on behalf of a beneficiary for qualified homebuyer expenses. The bill defines “qualified homebuyer expenses” to mean any of the following: (1) a down payment or closing costs for the qualified purchase of a single-family residence in Iowa that is the principal residence of the beneficiary if such beneficiary is a first-time homebuyer with respect to such purchase; (2) a cost, fee, tax, or payment incurred by, or charged or assigned to, a beneficiary as part of the purchase; or (3) any United States veterans administration funding fee incurred by the beneficiary in connection with a veterans administration home loan guaranty program. The bill defines “first-time homebuyer” to mean an individual who is a resident of Iowa and who does not own, either individually or jointly, a single-family or multifamily residence, and who has not owned or purchased, either individually or jointly, a single-family or multifamily residence for a period of three years prior to the date of the qualified purchase for which the eligible home costs are paid or reimbursed from an account. Under the bill, “qualified purchase” means the purchase of a single-family residence in Iowa by the account’s beneficiary 90 or more days after the date the participant first opened the account.
   The bill establishes an Iowa income tax deduction for the participant in an agreement for amounts contributed to an account by the participant during the applicable tax year, not to exceed $5,500 per beneficiary per year adjusted annually to reflect increases in the consumer price index. Additionally, income from interest and earnings received from the FirstHome Iowa program trust created in new Code chapter 12L is deducted from income. Distributions or transfers from an account are considered income for Iowa income tax purposes, to the extent such amount was previously deducted as a contribution to the trust, if the amount is used for purposes other than the payment of qualified homebuyer expenses.
   The bill allows a beneficiary under an agreement to be changed and allows agreements to be amended in order to enable participants to increase or decrease the level of participation, change the designation of successors, and carry out similar matters as authorized by rule.
   The bill requires the treasurer of state to segregate moneys received by the trust into two funds: (1) the FirstHome Iowa program fund, which includes moneys paid into accounts by participants; and (2) the administrative fund to be used for administration of the program, which includes administrative fees collected.
   The bill establishes procedures for the cancellation of agreements or termination of the program, requirements for ownership of payments made under an agreement, requirements related to income derived from investments, and establishes audit and reporting requirements for the program.
   The bill amends the Iowa first-time homebuyer savings account Act under Code chapter 541B to allow for the withdrawal and deposit of account balances under Code chapter 541B to accounts within the FirstHome Iowa program trust without penalty or taxation in this state if such withdrawal is deposited in an account within the FirstHome Iowa program trust within 30 days of the withdrawal. The bill also authorizes the treasurer of state to, by rule, provide for the direct transfer of moneys within an account under Code chapter 541B to a FirstHome Iowa program trust account without penalty or taxation in this state. The bill prohibits new accounts under Code chapter 541B from being established on or after July 1, 2026.
   DIVISION X —— PROPERTY ASSESSMENT SYSTEM TASK FORCE. By January 1, 2027, the department of revenue is required to prepare and submit a report, including any recommended changes, to the general assembly regarding the assessment of property in this state for taxation purposes, including but not limited to review of all of the following: (1) assessor qualifications and education; (2) assessor selection and retention; (3) functions of conference boards and examining boards; (4) property assessment procedures, frequency, and timelines; and (5) property tax assessment protest and appeal procedures and burdens of proof. The department may convene a task force of local and state officials and technical experts to assist in the review of such topics.
   DIVISION XI —— COUNTY OFFICERS —— APPOINTMENT IN LIEU OF ELECTION. Code section 39.17 provides, in part, for the election of a county auditor, a county treasurer, and a county recorder. This division of the bill eliminates those county officers from being elected and provides that each of those positions will be appointed by the county board of supervisors and be subject to removal under Code section 331.321, similar to other appointed county positions. The bill makes corresponding changes to other provisions of law to reflect that the county auditor, a county treasurer, and a county recorder will no longer be elected county officials.
   The term of office of each county auditor, county treasurer, and county recorder holding such office on the effective date of this division of the bill shall continue until expiration of the current elective term. After expiration of such term or vacancy in such office occurring prior to expiration, such office shall be filled by appointment by the county board of supervisors.
   The bill requires the secretary of state to determine if additional legislative changes are necessary to implement the changes in this division of the bill and, if necessary, submit legislation to the local government committees of the senate and house of representatives not later than January 1, 2027.